The government is providing a much-needed boost with the injection of £10m to support local authorities in implementing their powers.

The new high street rental auctions scheme allows LAs to put up for auction leases of retail units that have been empty for at least 12 years in the preceding two years.

An early and successful partnership with 12 LAs launched in 2024 and, in September 2025, Broxtowe Borough Council become the first LA to formally serve a high street rental auction (HSRA) notice.

What’s the background?

LAs have been handed high street rental auction powers under Part 10 of the Levelling up and Regeneration Act 2023. The radical new framework is part of a wider government drive to regenerate dying high streets and town centres that have gradually declined in recent years. The dismal state of many high streets accelerated as a result of the covid-19 pandemic.

In 2024, nearly 13,500 retail stores closed shop, according to the Centre for Retail Research - 28% up on the previous year. This year (2026) many more big names have closed, or plan to close, including the likes of House of Fraser, Morrisons, River Island, and charities such as the British Heart Foundation. A rise in longer-term empty units are depressing and uninviting; they attract crime; and they pose a financial liability for landlords and investors.

High street rental auctions scheme allows LA’s to auction off a suitable high street shop has been empty or unoccupied continuously for at least a year (or for at least 366 years during the previous two years) on a lease for up to five years. ‘Occupied’ means ‘substantial’ and ‘sustained’.

A notice period of 10-12 weeks must be served on the landlord to find a tenant. If unsuccessful, the LA can then go ahead with preparing for auction. Commercial landlords should consider whether is a risk their LA may serve notice with the intention of intervening where a unit has laid empty for more than a year.

Landlords will not, however, be left powerless:

Councils will be advised only to use the power where landlords are not taking reasonable steps to let the property
Landlords will be able to choose which bid to accept
Landlords will be required to grant a lease of 1 to 5 years to the successful bidder
If the landlord does not grant a lease, the council can step in to grant a lease of the property

Also, LAs will have to satisfy two criteria before forcing an auction.

A ‘vacancy condition’ (see above)
A ‘local benefit condition’ - an intended letting must be of benefit to the local economy, society or environment

The minimum required terms of the new tenancy contract are set fully out in government guidance.

In our upcoming conferences, Ian Quayle will be taking practitioners through the key questions for commercial landlords, including the auction time line and what a new tenancy will look like. He will also discuss cooperation with the LA, and how the process can be blocked. Book your conference.