The high street market today is complicated and needs a new, intelligent approach that doesn’t just look at how much stuff is being sold. Although the total numbers of visitors are still a problem, down by 15% to 20% compared to before the pandemic, 1 online shopping has levelled out, making up between 26.3% and 27.2% of all sales in early 2025.2 This stability shows that physical shops are still necessary, serving as vital places for collecting online orders, providing services, and anchoring the local community.4
The main reason businesses struggle to make a profit is the ongoing pressure from the economy at home, especially because higher staff wages are squeezing the profit margins for shops.5 This situation means that choosing a location must focus on efficiency, flexibility, and making sure the shop can offer high-value customer experiences, usually in the service sector.4
Successful location choices should now use a strict plan based on five main ideas, moving away from simple rent calculations. This plan includes:
1) Checking how flexible the planning rules (Class E) are in the area;
2) Making sure the business idea matches the local population’s spending habits;
3) Finding ways to lower financial pressures, especially through managing Business Rates and using government grants;
4) Creating a Connectivity Scorecard to check access for all types of travel and users; and
5) Working out if the location itself is becoming useless due to outside environmental risks, and protecting the investment against this. Following this guide is essential for making money in the changing 2025 UK commercial property market.
The overall state of the UK economy in 2025 is one of moderate but difficult growth. Forecasts for the economy’s growth have been slightly raised for 2025, settling between 1.2% and 1.3%.5 This small boost is mainly thanks to a better start to the year than expected, partly due to stronger international trade, including the impact of the announced UK-US trade deal.5
However, this mild optimism is held back by significant domestic problems expected to continue into the second half of 2025. Key concerns include high price pressures and an ongoing shock from elevated staff costs.5 Retail prices remain high because of rising input costs, which are directly influenced by tax policy.6
These high prices and slow growth happening at the same time have reduced consumer spending power, leading to a weak recovery in consumption.5 This situation has led the Bank of England (BoE) to delay expectations for further interest rate cuts until the first half of 2026.5 The consequence of this delay is that a full recovery in investment activity might not happen until 2027.5
This atmosphere means that any money spent now must be carefully scrutinised for the costs of borrowing and the expected returns. Since commercial property values are generally expected to pick up across 2025 and 2026, marking a low point in values 9, the smart decision is to prioritise immediate shop refurbishment or rebranding. Investors should use available public sector grants to reduce the initial costs of fitting out a new unit, rather than buying land purely for future appreciation.11
The job of a physical retail space has changed greatly as people have become more comfortable with digital shopping. The long-term growth of the UK’s online shopping sector seems to have hit a plateau, with online sales making up a steady 25% to 27% of the total in 2025.2 This stability means the focus is moving away from competition between online and physical channels towards the need for businesses that combine a physical shop with an online presence.4
The main goal for the high street is now to make the in-store experience better. Retail leaders understand that the physical shop must be rethought to encourage engagement, experience, and connection, moving past simple buying and selling.4 The physical store must offer experiences that digital channels cannot copy. To support this change, businesses are quickly adopting advanced technology.
Retailers are using various technology systems—from automatic stock management and reporting to generative AI for marketing content—to improve how they work and to cope with rising costs.14 These investments in technology are vital for creating the efficiencies needed to fight against the squeeze on profits caused by rising input costs.
The elevated labour cost environment, stemming from the 1.2-percentage-point increase in employer National Insurance Contributions (NICs) and the 6.7% uplift in the National Minimum Wage 6, creates a substantial challenge for running a business. These costs hit traditional retail models—those needing lots of staff but having low profit margins—the hardest. The financial reality is that these staff-related tax burdens are often passed directly to shoppers, keeping inflation high.6
As a result, viable investments are concentrated at two ends of the retail scale. Firstly, models that are highly automated and focused on efficiency are favoured, where technology adoption (like investment in AI and stock systems 14) drives down the cost per transaction. Secondly, money is drawn toward high-value, experience-based services, such as health clinics, gyms, or premium food and drink outlets, which benefit from the flexible Class E planning rules.15
These services usually have higher profit margins that can absorb the elevated staff and running costs while providing the ‘experience’ contemporary shoppers are looking for. Therefore, whether a location is viable increasingly depends on its ability to support either radical efficiency or substantial experiential value.
Business Rates are a fundamental and often costly part of running a high street investment. The total annual rates bill for 2025 to 2026 is calculated by multiplying the property’s Rateable Value (RV) by the government-set multiplier, which is 55.5 pence for the standard rate and 49.9 pence for properties that qualify for Small Business Rate Relief.16
A major factor is the reduction in the Retail, Hospitality, and Leisure (RHL) relief. For the 2025–26 financial year, eligible businesses receive a reduced discount of 40% off their business rate bills, capped at a maximum of £110,000 per business.16 This reduction means that medium-to-large high street operators must plan for a significantly higher rates bill than in previous years, making it even more important to get the most efficiency out of the Rateable Value.
Furthermore, increases from the 2023 revaluation continue to be introduced gradually through transitional relief. For 2025–26, the maximum increases vary greatly based on the Rateable Value: up to 25% plus inflation for properties with RV up to £28,000, and up to 55% plus inflation for properties with RV over £100,000.16 This gradual increase, while softening the immediate impact, requires careful financial planning to account for accelerating costs over the next two years.
The future outlook is dominated by the upcoming 2026 Revaluation. The Valuation Office Agency (VOA) is managing this process, and the government is expected to announce the new multipliers during the Budget 2025.17 This creates significant uncertainty about long-term rates costs, which reinforces the value of assets that are inherently flexible, allowing for quick changes if a location becomes too expensive for its current purpose.
Table 1 provides a summary of the 2025–2026 Business Rates structure:
| Rateable Value (RV) Band | 2025-26 RHL Discount | Transitional Relief Increase Cap (2025-26) | Appropriate Multiplier |
| Up to £28,000 (SBRR eligibility) | Variable/N/A | Up to 25% plus inflation | Small Business Multiplier (49.9p) |
| £28,000 to £100,000 | 40% (Capped at £110k) | Up to 40% plus inflation | Standard Multiplier (55.5p) |
| Over £100,000 | 40% (Capped at £110k) or N/A | Up to 55% plus inflation | Standard Multiplier (55.5p) |
The combined effect of high staff costs and the reduced RHL relief makes making the most of tax benefits even more necessary. The financial need now dictates that investment models must be set up to make use of available reliefs. Specifically, for properties with high overall Rateable Values, setting up the asset for mixed-use or multiple tenants can strategically maximise the eligibility for Small Business Rate Relief (SBRR) among sub-tenants, thereby reducing the total rates burden paid by the main occupier. This sophisticated financial planning is essential for making marginal locations viable.
The introduction of Use Class E (Commercial, Business and Service) in September 2020 was a major change to the planning system, designed to make the high street more adaptable.19 Class E brings together many previous uses, including traditional shops (A1), professional services (A2), restaurants (A3), offices (B1), and various health, medical, and indoor sport uses (D1/D2).15
Crucially, the law states that moving between any uses within Class E is no longer defined as ‘development’ and so does not need formal planning permission.19 This flexibility allows investors to quickly change a struggling shop unit into a profitable medical clinic or co-working space without long delays.
However, relying solely on the general flexibility of Class E without checking the local situation is a big risk. Despite the government’s aim to support recovery and flexibility, local planning authorities (LPAs) still have the power to impose planning conditions that limit the ability to freely change uses within Class E.23 These restrictions are often based on local plan policies created before 2020, which were designed to protect specific high street characteristics or to maintain a certain proportion of traditional shops in core areas.19
Therefore, strict checks before buying must include talking directly to the local council to confirm the specific uses allowed for the property. An investor cannot simply assume unrestricted Class E movement. Failure to confirm that a desired high-value application (e.g., medical clinic or gym) is locally acceptable may result in buying an asset whose best possible use is actually prohibited, undermining the entire investment idea. Local councils are increasingly defining town centres as broader places for services, leisure, and community activity, which justifies their willingness to control development seen as straying too far from community goals.19
Investors should include public funding opportunities in their spending plans, especially when targeting assets that need significant refurbishment or repositioning.
The UK Shared Prosperity Fund (UKSPF) is a key source of money for high street renewal. Local authorities manage High Street Small Business Grants, which are designed to pay for work that improves business premises and efficiency, or supports diversification.12 Applications for these capital grants are typically available through schemes running until March 2026.11 By including these grants in the financial model, investors can significantly offset the high initial costs associated with transforming empty or run-down units into viable commercial spaces.
The Oswestry High Street Heritage Action Zone (HSHAZ) provides a strong example of effective local regeneration.25 Through the use of targeted grants, the initiative funded crucial work, such as replacing old 1960s shop fronts with more suitable designs and converting empty upper floors into new homes. Specific examples include a £50,000 Repurposing Grant used at 5-9 Cross Street to help create nine quality apartments above the ground-floor retail unit.
This model shows that investment focused on visible street appeal and creating residential density can generate robust, local ripple effects. It confirms that successful regeneration does not rely only on attracting large national anchor tenants; strategic small-scale investment, often using grants to pay for heritage restoration and residential conversions, provides a reliable way to enhance the area’s commercial appeal and increase the number of visitors.
Business crime is now a major operating cost and risk for any high street investment. When shops are targeted, they face financial losses, which can lead to higher prices, less investment, and even store closures. This impacts everyone—owners, employees, and the local community that relies on these businesses. Unchecked retail crime can also help fund organised criminal networks and create an unsafe environment for workers and customers.
Retail crime has been rising sharply. The latest figures show over 20 million incidents of theft in one year, up from 16 million the year before. This is roughly 55,000 incidents every day. More worryingly, violence and abuse against retail staff have increased by over 50% in the last year, and a staggering 340% since 2020 (when there were about 455 incidents a day). Retailers are currently spending a record £1.8 billion annually on crime prevention measures, up from £1.2 billion previously.
Crime Prevention Strategies and Local Partnerships:
Investing in security is crucial. Modern CCTV systems are still essential and now work seamlessly with other security measures like alarms and access control. Modern cameras are increasingly intelligent, using features like thermal imaging and motion sensors, and can be monitored remotely, often as a cost-effective alternative or supplement to on-site guards. Given the rise in connected technology, compliance with data laws like GDPR and protection against cyber threats are more important than ever for security systems.
Local partnerships offer a critical way to manage risk. Business Improvement Districts (BIDs) are areas where local businesses invest together to improve the environment. BIDs are proven to reduce the total number of crimes in an area, typically showing a drop of about 10–11 incidents per quarter. This reduction is often strongest for problems like shoplifting, anti-social behaviour, and public order crimes.
BIDs often help by increasing security with ‘town link radio schemes,’ sharing crime intelligence digitally, and providing training on issues like counter-terrorism. Nine out of ten businesses in BID areas rate safety and security as one of their main concerns. Police forces use data analysis to identify high-crime areas and prolific offenders, using this information to create visible patrol plans and problem-solving strategies.
In 2025, choosing a successful high street location requires moving past simple visitor counts and relying on sophisticated tools that use real-time movement data, local population profiles, and spending habits.
National trends show that overall visitor numbers remain significantly below pre-pandemic levels.1 However, the small year-on-year increase in high street visitor numbers seen in August 2025 (+1.1%) suggests performance varies widely based on location and strategy.27 Investors must separate visitor data to understand who is visiting, when, and for how long.
The phenomenon known as the ‘Friday Effect’ is still very common, especially in Central London areas.28 This is the noticeable drop-off in daytime activity on Fridays, mainly because office workers are choosing to work from home. This lasting change makes traditional five-day week visitor metrics unreliable for city centre investments.
To handle this, analysis must divide visitors by type (worker vs. visitor) and how long they stay. A high-performing location in a city centre must show strong activity during traditional off-peak worker hours (evenings and weekends), confirmed by strong night-time activity and high transaction values on Fridays, indicating discretionary visitor spending.28
A location’s value is significantly boosted by the presence of key anchor institutions. Non-retail anchors, such as the Post Office, are proven to kick-start local economic activity, driving secondary footfall and extra spending to surrounding businesses.29 This effect is particularly strong in regions with lower regional wealth, such as North East England and Wales.29
Similarly, active Business Improvement Districts (BIDs) can reduce the risk of a location by carrying out improvements, such as distinctive lighting or targeted events, thereby guaranteeing a baseline level of visitors and supporting independent shops.30 The strength and activity of these local groups and anchor tenants must be a core part of site evaluation.
Effective site selection relies on matching the proposed retail or service offering to the actual consumption likelihood of the local area.
Tools for grouping people by demographics, such as Acorn (CACI), are essential, allowing investors to profile specific UK postcodes based on shared socio-economic characteristics . This enables an efficient check of the immediate customer base and helps identify market demand headroom across various locations .
However, the analysis must go beyond simple demographics (age, income) to include psychographics. This approach sorts consumers based on their attitudes, aspirations, and actions, offering a much more accurate measure of the likelihood to buy specific goods or services . This lifestyle profile provides the necessary precision for calculating the threshold population—the minimum number of people required to sustain the retail operation—thereby helping to avoid market saturation.31
The use of map-based information systems (GIS) is mandatory for this level of market analysis. Platforms like ArcGIS Online, ArcGIS Pro, and ArcGIS Business Analyst (Esri) help combine demographic, lifestyle, and spending data with map analysis . These tools allow for professional 2D and 3D mapping of market dynamics, strict site suitability assessment, and accurate customer grouping, turning raw data into highly visual and actionable strategic decisions .
A high street location’s resilience is directly related to its ease of access by various methods of transport and its commitment to design that works for everyone.
The Department for Transport’s Connectivity Metric provides a reliable way to measure how easily individuals can reach key destinations (including shops, leisure, and employment) using different modes: walking, cycling, public transport, and driving . This analysis is crucial: high scores in active travel and public transport access reliably point to prime urban retail hotspots, while private vehicle access tends to act as an ‘equaliser,’ supporting the viability of more spread-out or rural high streets .
Regarding vehicle access, research indicates that the immediate vicinity of stores in city centres requires little necessity for on-street parking.32 The focus should be on ensuring enough, easily navigable parking within a comfortable walking distance, concentrated in multi-story facilities around highly urbanized areas.32 A location analysis must evaluate the full customer journey, including drop-off points and proximity to main transport hubs .
Accessibility is a major competitive advantage and a basic requirement for inclusive high street investment. Government research indicates that poor accessibility remains a major barrier for disabled consumers across key retail areas (clothing, groceries, convenience stores).33 Barriers frequently cited include hard-to-navigate store layouts, difficulties accessing facility entrances, and insufficient staff help.33
The failure to incorporate design for all principles risks excluding substantial consumer groups, potentially forcing them toward costly or complex online alternatives.33 Therefore, site checks must assess physical accessibility (steps, internal moving space, checkout design) as a non-negotiable structural requirement, not merely a box-ticking exercise. A location that excels in accessibility enhances its potential customer base and reduces the risk of the location becoming out-of-date due to poor infrastructure.
Investment decisions must be supported by current and predictive data, facilitated by specialised software platforms.
To accurately test investment assumptions against the reality of customer behaviour, real-time movement data is essential. MRI Footfall Analytics and GEOLYTIX Tracker turn raw visitor activity, using algorithms and existing camera networks or unique mobile device tracing, into detailed data points . These tools monitor daily visitor numbers, track high street performance over time, and measure the quantified impact of local marketing activities or infrastructure changes . This real-time understanding of who is visiting (e.g., distinguishing between daily workers and weekend visitors) is critical for strategic decision-making in the dynamic 2025 market.
Strict property checks require detailed access to market transactions, ownership, and comparable values. Platforms like Searchland, which incorporates data from commercial powerhouses such as EG, provide instant access to live and historic sales and lettings listings.34 Investors can use this data to filter opportunities by price, size, use type, and tenure, while simultaneously accessing crucial information on lease events, ownership details, and market comparables (price per square foot).34
Providers such as Doorda, SafeGraph, and CoworkIntel also offer specialised commercial real estate data for the UK market.17 These platforms are indispensable for assessing fluctuating market values and accurately forecasting potential rental income.34
Table 3 summarises the essential tools required for expert-level location information in the UK market:
| Tool Category | Example Platforms | Key Data Output | Investment Decision Application |
| Local Population/Spending | Acorn (CACI), ArcGIS Business Analyst | Lifestyle Grouping, Consumer Spending Likelihood, Minimum Population required to sustain the business . | Match the product or service to the local population’s ability and desire to buy. |
| Movement & Visitor Tracking | MRI Footfall Analytics, GEOLYTIX Tracker | Daily Visitor Counts, Year-on-Year Comparisons, Worker vs. Visitor Grouping, Impact of local events . | Check real-time visitor patterns (e.g., weekend strength, ‘Friday Effect’) and measure the return on regeneration investment. |
| Commercial Property Information | Searchland (EG Data), Avison Young, Doorda | Live/Historic Sales Listings, Lease Details, Ownership Data, Market Comparables, Rental income potential.34 | Assess changing market values, perform checks on commercial ideas, and identify trending locations. |
A location becoming useless (known as Locational Obsolescence or LO) represents a critical, often irreversible risk in property investment. LO is defined as the loss of property value caused by outside factors and environmental changes around the property, such as major employer closures, bad infrastructure developments, or continuous decline in the area . Crucially, LO must be formally diagnosed and separated from concepts like a building’s physical failings (functional obsolescence) or standard wear and tear.36
A location may have structurally sound buildings, but if outside forces—such as a big change in government transport policy or a shift in local demographics—reduce the potential for economic return, the location is obsolete . Assessing LO is vital for long-term valuation, particularly given the high rate of retail failure observed across the UK.36
The UK high street shows extreme differences in how well different areas are performing. Data from 2025 demonstrates that city centre vacancy rates vary by more than 100% across the country.7 Highly successful urban centres like London, Cambridge, Oxford, and York maintain relatively low vacancy rates, often around one in twelve units empty.7 In contrast, cities such as Newport and Bradford show rates approaching one in five units empty.7
Furthermore, the risk is higher in areas defined by “persistent vacancy,” where shops have been closed for over three years.10 Regions like the North East face the highest persistent vacancy rate in England at 7.6%, contributing to an overall high street vacancy rate of 23.1%.10 These high-vacancy locations signal severe risk from the location becoming useless and are often associated with local economic distress.10
High-vacancy areas, while signalling elevated risk, are also prime targets for government help, such as the “Pride in Place” Programme announced in 2025, which provides funding to overlooked communities.8
Investment in these struggling locations should be structured not as a pure retail bet, but as a strategic opportunity for mixed-use conversion. The low buying costs typical of high-vacancy regions can be combined with public sector grants (UKSPF) and the flexibility of Class E planning to fundamentally change the economic function of the asset. By converting retail units to residential, co-working, medical, or community hubs, investors directly reduce the retail-focused risk of the location becoming useless while capitalising on regeneration efforts.37
Retail markets are characterised by a “natural cycle of churn and refreshment,” where brands succeed or fail based on their ability to respond to shopper needs.30 Careful investment requires proactive competitive analysis (PEST/SWOT) to find market gaps and avoid local saturation.39
Furthermore, advanced analysis, including predictive AI tools, 40 can be used to model and anticipate retailer failure, based on factors like store closures, insolvency filings, and profit trends.40 By combining these predictive models with real-time property information data (Searchland/EG), 34 investors gain an advantage: they can proactively approach freeholders or leaseholders to secure undervalued assets before they officially enter the market, thereby drastically reducing empty periods and preventing further decay in the streetscape.
Table 2: Comparative UK City Centre High Street Vacancy Rates (2025 Snapshot)
| City Centre Location Type | Example Cities | Estimated Vacancy Rate (2025) | Main Risk Profile | Strategic Focus |
| Highly Successful | London, Cambridge, York, Oxford | Low (c. 8.3% – 1 in 12 units) 7 | High Prices, Running Costs, Working From Home ‘Friday Effect’.28 | Niche/Experience, High-Value Services, Premium Food and Drink. |
| High Risk / Vulnerable | Newport, Bradford, North East (Avg) | High (c. 16.7% – 23.1%) 7 | Location Becoming Useless, Persistent Vacancy (up to 7.6%).10 | Mixed-Use Conversion (Class E), Using Grants (UKSPF), Community Hubs.8 |
Smart investment often focuses on the potential of key physical buildings to spark change. The successful saving and repair of the derelict Hastings Observer Building provides a model for high-value restoration.37 By bringing four floors back into use for the community, the project used physical restoration to create significant civic pride, justifying the investment and subsequently enhancing the appeal of the surrounding commercial area.
Similarly, the conversion of an abandoned Grade II-listed former bank in Bacup into a mixed-use facility containing housing and a co-working space demonstrates the practical application of Class E flexibility.37 This strategy maximises the asset’s value by meeting the simultaneous demands for commercial space and local residential density, thereby protecting the property from the volatile retail cycle.
The results from Oswestry’s High Street Heritage Action Zone (HSHAZ) confirm that highly local, targeted investment can yield a huge return. Through targeted Repurposing Grants, the scheme financed crucial conversions, such as the upper floors of 5-9 Cross Street into nine quality apartments, alongside the restoration of historic shopfronts .
The restoration of high-quality shopfronts in Oswestry, and the revitalisation of a gateway building in Bedford 37, confirms that visible capital improvements directly influence commercial appeal, attracting new businesses and providing a clear boost for the wider street scene.25 This evidence strongly suggests that small investment focused on creating density (residential conversion) and street appeal provides a more robust, guaranteed return on investment than schemes reliant on attracting large, increasingly unreliable retail anchors .
Successful high streets have stopped defining themselves purely by the number of shops, instead embracing a function as integrated places of service consumption, leisure, and quality experience.13
The importance of anchor businesses extends beyond traditional department stores. Non-retail entities, such as the Post Office, drive critical secondary spending on the high street, proving their role as essential catalysts for local economic growth, particularly in economically disadvantaged regions.29
Additionally, active local bodies, such as Business Improvement Districts (BIDs) in Eastbourne, use coordinated efforts, such as organising events or installing infrastructure (e.g., kilometre-long evening lighting), to boost visitor numbers and provide shared marketing support to independent businesses.11 When assessing locations, an investor must quantify the stability and strategic direction of these local partnerships, as they substantially reduce the investment risk by undergirding baseline visitor numbers and local engagement.
Choosing a UK High Street location in 2025 demands a major shift from traditional retail appraisal to a full assessment of asset flexibility, operational efficiency, and community integration. The primary challenge is reducing the severe profit squeeze from persistent staff cost inflation while navigating the complex rules of local planning constraints on Class E.
Long-term value creation lies in assets that actively blend buying and selling with essential, high-margin services, entertainment, and residential uses. This mixed-use strategy is the best way to protect the investment against cyclical retail decline and the lasting structural impacts of remote work.
The following checklist represents the mandatory checks for any proposed UK High Street investment in the 2025 environment:
The expert consensus is that high street assets succeeding in 2025 are those treated as integrated civic and commercial places, strategically spending capital to foster resilience through diversification and advanced data use. Flexibility and precision are the new determinants of locational superiority.
Sources: