The high street continues to evolve as towns and cities respond to changing consumer behaviour, retail decline and the growth of online and out-of-town shopping. While these changes have left visible gaps in many town centres across County Durham and the wider North East, they have also created opportunities for property investors and landlords willing to adapt existing properties to meet new demands.
Across the region, both local authorities and central government have committed to regeneration initiatives aimed at reshaping the high street and encouraging long-term investment to tackle high vacancy rates, noted at over 18% in some areas. County Durham is seeing a mix of central government funding and local initiatives, including the £25 million Towns and Villages Investment Plan and £20 million in Pride in Place funding for specific areas, to regenerate high streets. Key measures include piloting High Street Rental Auctions for empty shops and offering grants for business improvements.
High Street Rental Auctions are being piloted for areas with high vacancy rates, focusing on Bishop Auckland and Stanley, with Darlington Borough Council holding a consultation to look at options to tackle town centre vacancies.
Repurposing Retail Space
One of the clearest trends emerging from this regeneration drive is the repurposing of redundant retail space. Vacant shops and former department stores are increasingly being converted into residential, leisure and community uses, helping to bring footfall back into town centres and make more efficient use of existing buildings.
Recent projects our commercial property team has been involved in reflect this wider shift, including:
- the regeneration of a Grade II listed building on Sunderland High Street, formerly used as a youth offending service, into a ground floor bar, taproom and restaurant with office space above;
- the grant of a new lease of the former Woolworths building in Newton Aycliffe town centre, bringing a long-vacant property back into use as a community hub;
- conversion of upper floor space in Durham Market Place into student accommodation;
- the lease of a former retail unit on Silver Street, Durham, for use as a restaurant; and
- proposals for a rooftop extension to an urban shopping centre to create a padel tennis complex.
These schemes demonstrate how flexibility of use and creative redevelopment can unlock value in properties that might otherwise remain underutilised.
Planning and Regulatory Considerations
The introduction of planning Use Class E in September 2020 has played a significant role in facilitating this change. Class E allows movement between a wide range of uses, including retail, restaurants, offices, gyms and certain healthcare facilities, without the need for a formal planning application in many cases. This flexibility has made change-of-use projects more attractive to investors and reduced development timescales.
In addition, permitted development rights allowing change of use from commercial to residential (Use Class C3) can enable certain conversions to proceed without full planning permission, subject to prior approval. However, these rights are not universal. In areas such as Durham City, Article 4 Directions restrict permitted development rights, returning greater control to the local planning authority. In Darlington, an Article 4 Direction is due to come into force in July 2026, requiring specific planning consent for changes of use to houses in multiple occupation.
Durham City also contains a high concentration of listed buildings and conservation areas. Redevelopment or conversion works to such properties can introduce additional complexity, including the need for Listed Building Consent where works affect the character of a listed building.
Legal considerations for investors and landlords
While the opportunities presented by high street regeneration are positive, acquiring and redeveloping town centre property can present legal challenges. Common issues include title defects, existing occupational leases that may require renewal or assignment, planning constraints and environmental considerations. These factors can have a material impact on the viability and timing of a project if not identified early.
For investors and landlords considering high street acquisitions or redevelopment projects, early legal advice is therefore essential. Taking a proactive approach at the outset can help manage risk, avoid delay and ensure that opportunities are fully realised.
For more information, please contact...
Diane Hall
Managing Associate
Diane Hall is a Managing Associate in Swinburne Maddison’s Commercial Property team, having joined the firm in November 2022. She was promoted to Managing…
