Amid persistent talk of the demise of the high street, the capital’s suburban shopping centres are bucking the trend – not only surviving but actually performing relatively well. That’s the message from a new study of 545 London high streets from the Centre for Cities think tank.
Analysing three years’ worth of debit and credit card transactions – millions of payments in all – alongside other data on empty shops and rateable values, the report finds high street vacancy rates outside the city centre running at between eight and 10 per cent. That’s well below even city centre vacancy rates outside London, with almost 80 per cent of the capital’s suburban shopping streets having a lower vacancy rate than the UK’s city centre average.
Very few empty shops then. That’s the case, the report shows, in all parts of the city, despite London’s “stark divides between different neighbourhoods”, and whether a high street is classified as primary, secondary or local. And there’s no correlation either between vacancy rates and the capital’s Business Rate burden, which is generally significantly higher than in the rest of the country.
London’s suburban high street vacancy rates are “not the sign of distress that they are in other parts of the country”, the report concludes. Instead, they “typically represent a healthy surplus of high street space that can be quickly occupied by new businesses if demand changes…London’s suburbs seem to be in a healthy balance”.
The key factor behind London’s success story, the report says, is strong demand across the city, shaped by relatively high average incomes and more people in high street “catchment” areas, as well as the number of international visitors in particular places. And that’s the case even for the city’s “weakest” shopping streets, where rateable values, which determine Business Rate demands and reflect rent levels, are lower.
Outside London, as previous Centre for Cities research has shown, low rateable values go hand in hand with higher vacancy levels, reflecting low demand for space. But in the capital, even those high streets with the lowest rateable values do not consistently experience high vacancies, the new report finds: “Demand across London’s high streets is so consistently strong that even its weaker high streets can keep units filled and vacancy rates low.”
It’s not an entirely rosy picture: Business Rates and the rise of online shopping do put pressure on the bottom line of suburban London’s high street retailers, the report says. Recent tinkering, such as the plan to shift more of the Business Rate burden to premises with rateable values of £500,000 or more, disproportionately affecting London and the south east, will add to that pressure. There are also a small number of London high streets, including “primary” centres such as Ilford and Croydon, where vacancy rates are relatively high by national standards.
But while some shopping streets may require specific interventions, perhaps to “reduce the amount of excess retail space”, the report says that the general approach to safeguarding the city’s high streets should be to focus on “strengthening the wider local economy”, putting more money into Londoners’ pockets.
For the capital, that means pushing housing costs down by building more homes, including through Green Belt release, boosting higher-paid job creation by supporting “Grade A” office development in the city centre, and using new “tourist tax” revenue to attract more visitors, growing a sector which already contributes significantly across the city. As report co-author Oscar Selby says, it is “supporting spending power and demand” that can fend off “the death of the high street”.
Follow Charles Wright on Bluesky. Read the Centre for Cities report in full. Photo: East Street, Barking.
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