New government plans to be detailed next month could force landlords to auction off long vacant units, potentially lowering the barrier to entry for small restaurants and other food businesses.
Property owners would be obliged to take part in local council auctions for units empty longer than six months, including those that do not meet the planning permission use class required for restaurants at the time of the auction.
As retail and hospitality recover from the impact of the COVID-19 pandemic, which closed an estimated 10 percent of U.K. restaurants, the ties between a property’s rentable value and lending potential has led some landlords to leave units empty, rather than reduce rent and see lending potential decrease. This auction system might change that, but whether it would put a meaningful dent in the London restaurant property market remains to be seen.
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