📢 Transformation on the Horizon for Loughborough Town Centre! 📢
It's essential that we have an open and constructive discussion about the future of Loughborough town centre and high streets across the UK. This conversation should be grounded in the realities of today’s world, informed by facts, and reflect a clear understanding of the roles played by both the Council and private investors — rather than being influenced solely by nostalgia or misconceptions.
It's clear that the way we shop and use our town centres is changing dramatically, and Loughborough is no exception .... The rise of online shopping has become a dominant force, with online retail accounting for a significant portion of consumer spending1 .... Back in 2018, it was already 20% of total retail sales1 , and by 2022, this had surged to 27% In 2005 it was just 3%. We are the problem not the council or stores!
This isn't just a Loughborough trend; it's a nationwide shift impacting traditional brick-and-mortar stores everywhere1 ....
We've seen how traditional competitors like supermarkets and retail parks posed challenges in the past1 , but the impact of online shopping has surpassed them1 . The old model of relying solely on physical retail is facing an uphill battle4 .
Unfortunately, this has led to increased vacancy rates on many high streets, sometimes creating a vicious cycle of decreased footfall and store closures5 . We’ve even seen well-known national retailers facing difficulties6 ....
Here in Loughborough, the proposed redevelopment of the privately-owned Carillon Court shopping centre is a direct response to these difficult realities. With reports indicating that over 90% of shopping centres are struggling financially because rents are not covering costs for landlords8 , standing still is not an option.
The current situation with Carillon Court, as an underperforming retail space7 , necessitates a forward-thinking approach.
The plan to replace a significant portion of the loss-making Carillon Court with around 800 purpose-built student flats, alongside retained and potentially new retail spaces facing Market Place and improved pedestrian connections, offers a crucial opportunity for Loughborough to adapt and thrive. This is a £75M investment in our town Let’s look at why this could be seen as a positive step:
•
A Smart Economic Move: Loughborough University is a cornerstone of our town, contributing a substantial £940 million to the UK economy and supporting 14,400 jobs8 . A significant student population is a natural consequence of this success. Providing Purpose-Built Student Accommodation (PBSA) in the heart of the town centre directly harnesses this economic energy for the benefit of Loughborough9 . Students living in the town centre will contribute to the local economy by renting, shopping, and using local services like cafes, restaurants, and gyms, creating a more vibrant and active environment9 . This increased demand can encourage new businesses to invest in our town centre9 . The Loughborough Town Centre Masterplan explicitly recognizes the presence of Loughborough University as a key asset to build upon10 ....
•
Revitalizing Our Town Centre: This isn't the end of retail in Loughborough, but a strategic diversification. Successful high streets are increasingly moving beyond traditional retail to create a more diverse mix of businesses, including leisure, entertainment, and even residential spaces5 . The Masterplan itself emphasizes the need to enhance the townscape by ensuring that new development responds to the distinctive pattern of uses and character across the town and to protect and enhance the town’s offer12 . Integrating residential, including student accommodation, into the town centre footprint can provide increased foot traffic at all times of the day, supporting the remaining retail and service businesses13 .
•
A Proactive Solution to HMO Pressures: The concentration of student HMOs in residential areas can create challenges for local communities14 . By providing attractive, well-managed PBSA in the town centre15 , we can help to alleviate the pressure on traditional housing stock in other neighbourhoods9 . This could open up the possibility of more homes being available for young families and long-term residents14 . Local authorities often use measures like Article 4 Directions to restrict HMOs, and PBSA offers a positive alternative for meeting student housing needs9 ....
•
Aligning with a Broader Vision: The Loughborough Town Centre Masterplan acknowledges the evolving role of town centres as high street retailers face ongoing competition from internet sales10 .... The plan actively suggests mixed-use development as a key strategy for the future13 .... The redevelopment of Carillon Court aligns with the Masterplan's objectives to secure comprehensive redevelopment of key town centre opportunity sites20 .
This is undoubtedly a significant change, and change can bring uncertainty. However, the facts are clear: high streets everywhere are adapting to a new reality. The choice before us is to either watch underutilized spaces decline further or to make bold and strategic decisions that position Loughborough for a more sustainable and vibrant future.
People posting on Facebook often make the same points and we need address them here… the 'I don't know why… ' type of posts. You know the type!
It's a valid question why developers might seem more inclined to invest in student housing rather than general housing for local residents. Several factors contribute to this, and understanding the controls councils have over rents and rates will also provide context.
Firstly, regarding developers' investment choices:
•
Profitability of Student Accommodation: Purpose-Built Student Accommodation (PBSA) has become an attractive investment due to consistent demand from the large student population in Loughborough1 . The Loughborough Town Centre Masterplan notes that major student development companies have delivered stock in the area, and the University itself is expanding its accommodation, indicating strong demand1 . Rents for PBSA in Loughborough can range significantly, and yields for developers can be fairly keen2 . This potential for return makes student housing a viable proposition for developers3 .
•
Existing Demand: Loughborough is a university town with a significant number of students enrolled1 .... This readily available demand reduces the risk for developers compared to general housing, where market fluctuations and buyer/renter preferences can be more varied.
•
Challenges with General Housing (PRS): While there's a growing interest in the Private Rented Sector (PRS), delivering large-scale PRS schemes can face challenges. For instance, premium PRS providers might require values exceeding what's currently achievable on new builds in Loughborough, making it less immediately attractive6 . Traditional 'build and sell' housebuilders can sometimes outbid PRS operators for land7 .
•
Town Centre Living Preferences: Certain segments of the population, like students and young professionals, often favour town centre living if an attractive environment with good amenities is available8 . The Masterplan itself recognizes the potential for residential to be a key growth sector for Loughborough town centre, including flatted or town house development, retirement homes, and additional private student accommodation9 .
Now, let's clarify the controls local councils have over rents and rates, and the types of shops moving into town centres:
•
Council Control Over Rents: Local councils in the UK, including Charnwood Borough Council, do not have the power to set or control commercial or residential rents4 . Rents are determined by market forces, agreements between landlords and tenants, and the value of the property.
•
Council Control Over Business Rates:
◦
Local councils are responsible for billing and collecting business rates10 . These funds are then distributed to central government and a portion is retained by the council for local services10 .
◦
The actual calculation of business rates is largely determined nationally, not locally11 . The formula is: Business rates = Rateable Value (RV) × Multiplier12 .
▪
The Rateable Value (RV) of a non-domestic property is an estimate of its annual rental value, determined by the Valuation Office Agency (VOA), a branch of HM Revenue and Customs (HMRC)13 .
▪
The Multiplier (also known as the 'rate in the pound') is set annually by the government, with different multipliers for small and larger businesses12 . These multipliers can be adjusted by the government to reflect inflation or policy changes12 .
◦
Councils have limited discretion to offer certain reliefs to businesses10 :
▪
Hardship Relief: For businesses experiencing temporary financial difficulty10 .
▪
Local Discounts: Councils can offer additional discounts based on local priorities10 .
▪
Small Business Rate Relief (SBRR): While national eligibility criteria apply, councils manage the applications10 .
◦
It's crucial to understand that councils cannot change the Rateable Value or the Multiplier14 . Also, any reliefs or discounts funded by the council must be balanced against their budgets, meaning this discretionary support is often limited14 .
•
Types of Shops Moving Into Town Centres: The traditional retail landscape is evolving, and town centres are seeing a shift in the types of businesses that are occupying commercial spaces15 .... This is not unique to Loughborough and is a trend observed across the UK15 . Some key changes include:
◦
Experiential Retail: Stores that offer unique experiences like workshops or events are becoming more common15 .
◦
Food and Beverage: Cafes, restaurants, and bars are frequently filling vacant retail spaces, often contributing to a more vibrant evening economy15 .... The Loughborough Town Centre Masterplan even suggests the potential for Wards End / Bedford Square to become a specialist independent food and drink quarter20 .
◦
Service-Based Businesses: Hair salons, gyms, and other service providers are increasing their presence in town centres15 .
◦
Increase in Independent Retailers: Some areas are seeing a rise in the number of independent retailers15 .... The Masterplan aims to encourage further independent specialist shops23 .
◦
Growth of Discount Retailers: The discount grocery retailing sector, with brands like Lidl and Aldi, continues to expand24 ....
◦
Leisure Uses: Developments like cinemas and entertainment complexes are playing a more significant role in attracting people to town centres17 ..., as seen with the Cineworld complex in Loughborough19 ....
◦
Conversely, there has been a general decrease in the representation of fashion retailers in town centres over the last decade, a trend observed across the UK22 .
In summary, developers' decisions to invest in student housing are driven by factors like profitability and existing demand, particularly in university towns like Loughborough. Local councils have limited control over business rates and no direct control over rents, as these are largely influenced by national regulations and market forces. Finally, the types of businesses moving into town centres are diversifying beyond traditional retail to include more experiential, food and beverage, service-based, and leisure offerings, reflecting the changing ways people use these spaces.
This redevelopment plan, with its blend of student living, retail, and improved connectivity, is a crucial step towards ensuring Loughborough town centre remains a thriving hub for years to come.
Let's embrace this opportunity for transformation. The choice if for an empty decaying retail space to be left to decline.. #Loughborough #TownCentreRegeneration #FutureofRetail #StudentLiving #MakingDifficultChoice