The Levelling-up and Regeneration Act 2023: What landlords and business owners need to know
The Levelling-up and Regeneration Act 2023 represents one of the most significant reforms to planning and development in England in recent years. Aimed at addressing regional inequalities and streamlining local regeneration, the Act has clear and direct implications for commercial landlords, tenants, and business owners.
High Street rental auctions
Perhaps the most headline-grabbing change for commercial property owners is the introduction of High Street rental auctions. Local authorities now have the power to auction leases of vacant high street premises that have remained unoccupied for over 12 months – either continuously or cumulatively over two years.
Landlords will receive notice and have the right to respond, but if the process goes ahead, short-term leases can be granted to new tenants via a local authority-managed auction – without landlord involvement in setting the lease terms or selecting the tenant.
Compulsory purchase reforms
The Act also strengthens compulsory purchase powers for local authorities. These reforms – including the removal of the requirement to demonstrate a “compelling case in the public interest” in certain situations – may make it easier for councils to assemble land for regeneration purposes.
Commercial landlords with underutilised property in targeted areas should consider reviewing their asset strategies in light of this increased risk of intervention.
Planning system overhaul
The Act introduces National Development Management Policies (NDMPs), which will take precedence over local plans where conflicts arise. This marks a fundamental shift in how development priorities are determined across regions.
Measures to digitise and simplify planning applications are intended to reduce delays. From a practical perspective, this could be beneficial for commercial developers seeking quicker turnarounds, although the transition to digital systems may pose short-term challenges.
New infrastructure levy
Although details remain under consultation, the Act establishes a framework for a new Infrastructure Levy to replace Section 106 agreements and the Community Infrastructure Levy in England.
Based on final development values, this change could affect commercial developments’ cost structures. Business owners and developers should watch closely for secondary legislation to understand how this may affect project viability and negotiations.
Key Takeaways for landlords and business owners
- Stay proactive: Long-term vacancy could result in a loss of control under the new rental auction regime
- Monitor planning changes: National policies may override local plans, affecting development rights
- Engage early: Landowners in regeneration zones may face greater compulsory purchase risk
- Plan for cost impacts: The new Infrastructure Levy may alter financial forecasts for commercial developments.
While the government’s stated goal is to promote economic equality and revitalisation, the practical implications of the Levelling-up and Regeneration Act 2023 are both complex and far-reaching.
At Attwaters, we can provide tailored legal advice to help you mitigate risks and capitalise on the opportunities presented by these landmark reforms.
