The Future of Loughborough Town Centre: A Pragmatic Look
Like many important issues, the discussion about Loughborough town centre’s future – and indeed, the evolution of high streets across the UK – needs to be well-informed and realistic. We need to consider the economic and social realities, backed by evidence, and understand the distinct roles that both local government and private investment play. It's about looking at the facts, not just what we remember or assume. Hopefully even with this article there is room to disagree about certain aspects but not the underlying issues. Hopefully it also helps people before posting on Facebook. Councils do not decide which shops open and close! We are to blame for the changing nature of the High street far more than our local councils!
A Changing Retail Landscape
The way we shop and use town centres has changed dramatically, and Loughborough is no exception. Online shopping is a huge force in retail today, making up a significant and growing portion of what we spend. For example, in 2005, only 3% of retail sales were online. By 2018, that jumped to 20%, and by 2022, it was 27%. This fundamental shift in buying habits is a societal trend with broad economic implications, extending beyond what local councils or individual businesses can directly control.
This changing retail environment isn't unique to Loughborough; it's a nationwide shift affecting traditional shops everywhere. While older challenges came from supermarkets and out-of-town retail parks, the widespread influence of online commerce is now the biggest disruptor. As a result, the traditional business model, relying solely on physical shops, faces significant challenges.
Sadly, this shift has led to more empty shops in many town centres, often creating a negative cycle where fewer people visit, leading to more business closures. Even well-known national retailers have struggled in this changing market.
Carillon Court: A Strategic Response
In Loughborough, the proposed redevelopment of the privately owned Carillon Court shopping centre is a direct and thoughtful response to these economic realities. Reports show that many UK shopping centres are in a difficult financial position, where rental income isn't enough to cover landlord costs. This highlights that simply maintaining the status quo isn't economically viable.
Carillon Court’s current performance as an underperforming retail asset means we need a proactive and strategic approach to its future. The proposal to replace a large part of the struggling Carillon Court with around 800 purpose-built student accommodation units, while keeping and potentially improving the retail spaces facing the Market Place and enhancing pedestrian access, offers a crucial opportunity for Loughborough to adapt and secure its long-term economic vitality. This significant £75 million investment warrants careful consideration of its potential benefits:
Strategic Economic Boost: Loughborough University is a cornerstone of the town, contributing substantially to the UK economy and supporting many jobs. A large student population naturally follows from this academic and economic importance. Providing Purpose-Built Student Accommodation (PBSA) in the town centre directly leverages this economic activity for Loughborough's benefit. Students living in the town centre will spend money on rent, in shops, and on local services, creating a more vibrant and economically active urban environment. This increased demand could encourage new businesses to invest in the town centre. In fact, the Loughborough Town Centre Masterplan specifically identifies the University as a key asset for future development.
Revitalising the Town Centre: This initiative doesn't mean the end of retail in Loughborough. Instead, it's a strategic move to diversify what the town centre offers. Successful urban centres are increasingly moving beyond a sole reliance on traditional retail to create a more varied mix of businesses, including leisure, entertainment, and residential uses. The Masterplan itself stresses the need to improve the urban fabric with developments that respect the town's unique land use patterns and architectural character, thereby protecting and enhancing its overall appeal. Integrating residential uses, including student accommodation, within the town centre can increase footfall throughout the day, providing vital support to remaining retail and service businesses.
Easing Housing Pressure: The concentration of student Houses in Multiple Occupation (HMOs) in established residential areas can create challenges for local communities. Providing attractive, well-managed PBSA in the town centre offers a strategic way to reduce pressure on traditional housing in other neighbourhoods. This could potentially free up more housing options for young families and long-term residents. Local councils often use planning policies to manage the growth of HMOs, and PBSA offers a strategically aligned alternative for meeting student housing needs.
Aligning with Development Goals: The Loughborough Town Centre Masterplan acknowledges the evolving role of town centres in the face of ongoing competition from online retail. The plan actively supports mixed-use development as a key strategic direction for the future. The proposed redevelopment of Carillon Court aligns with the Masterplan's goals to achieve comprehensive regeneration of key opportunity sites within the town centre.
While such significant changes naturally bring some uncertainty, the evidence regarding how high streets nationwide are adapting is compelling. The strategic choice facing Loughborough is whether to let underutilised commercial spaces continue to decline or to implement decisive and forward-thinking strategies that position the town for sustained economic resilience and vibrancy.
Addressing Common Concerns: Student Accommodation and Local Control
Concerns often raised by the public, especially about the apparent focus on student housing, need to be addressed directly and objectively. The perception that developers prefer investing in student accommodation over general residential development is influenced by several factors, and understanding how local councils operate regarding rental rates and business rates provides essential context.
Why Developers Choose Student Accommodation:
Financial Attractiveness: Purpose-Built Student Accommodation (PBSA) has become a financially appealing investment because of the consistent demand from Loughborough's large student population. The Loughborough Town Centre Masterplan itself recognises the presence of established PBSA providers and the University's ongoing expansion of its residential portfolio, indicating strong market demand. Competitive rental yields achievable in the Loughborough PBSA market make such developments commercially viable for investors.
Steady Demand: Loughborough's status as a prominent university town ensures a substantial and relatively predictable pool of potential tenants. This established demand reduces investment risk for developers compared to general residential development, where market fluctuations and tenant preferences can be more volatile.
Challenges with General Housing Development: While interest in the general Private Rented Sector (PRS) is growing, delivering large-scale PRS schemes can face economic and logistical complexities. For instance, premium PRS operators might need rental values higher than what's currently achievable for new-build properties in Loughborough, potentially making such ventures less immediately financially attractive. Additionally, traditional 'build and sell' residential developers can sometimes outbid PRS operators for land.
Urban Living Preferences: Certain groups, such as students and young professionals, often prefer town centre living with good amenities. The Masterplan acknowledges that residential development, including various housing types and additional private student accommodation, could be a key growth sector for Loughborough town centre.
How Local Councils Operate (Rents and Business Rates):
No Control Over Rents: Local councils in the UK, including Charnwood Borough Council, do not have the legal power to regulate or control commercial or residential rental rates. Rental values are determined by market conditions, agreements between landlords and tenants, and the property's inherent value.
Business Rates – Limited Local Control:
Local councils are responsible for billing and collecting business rates. These revenues are then distributed to central government, with a portion kept by the council to fund local services.
The method for calculating business rates is mostly set at the national level. The calculation is based on the rateable value of the property (an official estimate of its annual rental potential) multiplied by a nationally determined percentage.
Local councils have limited power to offer specific forms of rate relief to businesses, such as hardship relief or locally determined discounts, within national guidelines and their own budget constraints. The national Small Business Rate Relief scheme is also managed locally.
It’s crucial to understand that local councils cannot unilaterally change the rateable value or the national percentage used in the calculation.
The Evolving Look of Town Centres:
The traditional retail landscape is undergoing a significant transformation, with town centres seeing a diversification in the types of businesses occupying commercial premises. This isn't unique to Loughborough but is happening across the UK. Key trends include the growth of experiential retail, an increased presence of food and beverage establishments, the expansion of service-based businesses, a rise in independent retailers in some areas, the continued growth of discount retail, and the increasing importance of leisure and entertainment venues as anchor attractions. Conversely, there has been a general decline in the number of fashion retailers in town centres nationally.
In summary, developers' investment decisions are influenced by a complex mix of economic factors, including the relative attractiveness of different property types, like student accommodation in university towns such as Loughborough. Local councils operate within a defined legal framework with limited direct control over factors like rental rates and the core mechanics of business rate calculation. The changing commercial landscape of town centres reflects broader shifts in consumer behaviour and economic priorities.
The proposed comprehensive redevelopment plan for Carillon Court, with its strategic integration of student residential accommodation, retained and potentially improved retail space, and enhanced urban connectivity, represents a critical and thoughtful step towards ensuring the long-term economic resilience and social vibrancy of Loughborough town centre. A pragmatic and forward-looking approach is essential to navigate the evolving landscape and secure a sustainable future for the town.
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