Posted by Tony Millson, Partner
On 1 September 2016 Withy King LLP merged with Royds LLP. The trading name for the merged firm is Royds Withy King. All content produced prior to this date will remain in the name of the firms pre-merger.
Pensions to revive derelict high streets?
Britain’s high streets now present a sorry sight, with shops boarded up. We have suffered a “perfect storm” of large retailers moving to out-of-town shopping malls, landlords unwilling to drop rents, councils unwilling to drop rates and car-parking charges, and customers buying more of their goods online.
But tucked away in the last Budget was an interesting proposal. The Government is to consult on allowing self-invested personal pensions (SIPPs) to invest in empty commercial property that is being converted to residential use. Under the present rules, SIPPs cannot invest in residential property.
Back in 2006 the Labour Government was planning to allow SIPPs to invest in residential property, but the proposal was dropped at the last minute. Now the Coalition Government has accepted that the country has a housing problem, 15% of high-street properties are empty, and people want to live in town centres. It is obvious from a walk round our more established town centres that many of the shops are just converted houses – Chichester is a good example – so converting empty shops to houses again is not as daft as it sounds.
This also ties in with the suggestion that SIPPs should be allowed to invest in buy-to-let properties, most of which are run (as many retired landlords will tell you) as small businesses anyway.
The noble efforts of Mary Portas and others to rescue retail businesses will only scratch the surface. These efforts will help badly-run, but basically profitable, niche businesses, but will not help the Woolworths or Comets or HMVs. Pension schemes, on the other hand, are always looking for good, safe investments. Town-centre housing might be just the thing.
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