Quarter of shop space in England and Wales lost after 2008 crash
More than a quarter of all retail floor space in England and Wales disappeared in the aftermath of the 2008 financial crisis, research has shown, as the industry struggled with the shift to online purchases.
The amount of shop space fell in all but five of 348 local authorities analysed in the study by academics at Northumbria University, Newcastle.
In 2008, there was more than 157m square metres of retail floor space in England in Wales. By 2015, the figure had dropped to just under 114m square metres, a 27.6% fall.
The analysis covers the period before the latest crisis to hit the UK retail sector, which has led to the collapse of high street brands including Toys R Us and Maplin. Many others including Marks & Spencer and Debenhams are closing stores and cutting staff.
Alongside the rapid rise of online shopping, retailers have been affected by consumers’ weak income growth.
The rateable value of retail property fell in two-thirds of the local authorities analysed during the period, despite the loss of a quarter of the total supply.
The figures illustrate a stark divide between regions. The value of central London locations surged during the period, with the biggest increase recorded in Westminster, where the average rateable value for retail premises grew by almost 80%.
In contrast, the value of retail property in south Wales slumped as areas such as Swansea, Port Talbot and Bridgend suffered from the decline of the steel industry. The local authorities on the south coast of Wales between Cardiff and Swansea all saw the rateable value of properties fall by more than 20% between 2008 and 2015.
The study compared the government’s data on business rates paid by companies on their property. The data was made available in the 2010 and 2017 rating lists.
The fall in the total rateable value of retail space could have significant implications for Britain’s model of funding local public services, said Paul Greenhalgh, a professor of real estate and regeneration at Northumbria, and a leader of the research.
Under changes to the funding formulae introduced by George Osborne as chancellor, local authorities keep more of the money collected from business rates. A fall in the total rateable value of properties in a local authority area could therefore leave the authority’s budget more exposed to price fluctuations in the property market.
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