Commercial and Industrial Property Vacancy Statistics
1998/99 to 2004/05

Introduction

This research monitor details vacancy rates for commercial and industrial properties using the latest results from statistics released by the Department for Communities and Local Government (DCLG), formerly the Office for the Deputy Prime Minister.

This particular article details Lancashire, Regional and England figures for the seven-year period from 1998-99 to 2004-05. The original data can be downloaded from either the DCLG's Planning Statistics section or the Office for National Statistics' Neighbourhood Statistics website.

The statistics show estimated vacancy rates for commercial and industrial properties that are derived from the amount of relief given on business rates for empty properties in each local authority. Vacancy information is reported to the DCLG by the annual National Non Domestic Rates 3 (NNDR3) return. The returns are used to estimate the value of empty property as a proportion of the total value of property. The data are used as an indicator for local authorities to measure levels of business activity in their area, and also monitor the potential for new development. Since these are estimated vacancy rates they should be viewed with caution as they may not reflect actual vacancy rates.

The National Perspective

The average vacancy rate for properties in England in 2004/05 was 9%. This represents an increase from 7% in 1998/99, when the first estimates in this series were calculated. For the North West area, there was a three percentage point increase to 10% in 2001/02, which has been maintained over the past four years. The highest vacancy rates in 2004/05 were recorded in London and the West Midlands, both with 11%, which is marked contrast to the rate of 6% in the South West.

It appears that there is no simple correlation between vacancy rates and economic success. Other factors are in play to produce a set of statistics that are not simple to interpret. The average for England as a whole has risen from 7% to 9% during a time of sustained economic growth. The level of new completions, turnover of vacant sites and the problem of properties that no longer meet market requirements combine to present conflicting pressures and a confusing picture. As the economy develops, wholesale shifts occur away from manufacturing units and office space that is not equipped to cater for modern IT networks. New property comes on to the market whilst some older property becomes vacant and difficult to let. Other units may be demolished, refurbished for new industrial or commercial use, or may be deleted from the figures entirely by being converted in to city centre flats or for other uses.

Economic growth therefore creates rapidly shifting markets that can result in high vacancy rates in affluent and not so affluent areas for entirely different reasons.

The two local authorities with the highest vacancy rates out of 354 authorities across England in 2004/05 were Hackney (28%) and Slough (20%). Also of note were the results for Birmingham, which recorded the third highest rate (19%), Ealing and Manchester both (18%), whilst Hyndburn was in 6th highest place in the whole of England with 17%.

At the other extreme, the Isles of Scilly and West Somerset were the local authorities with the lowest estimates of vacant property in 2004/05, the first actually recording 0% and the second 1%. Other rural areas in the North East and in to Devon and Cornwall also recorded low rates, but perhaps surprisingly Sunderland recorded the sixth lowest rate with 2%.

There is no simple correlation between the wealth generating capacity of an area and property vacancy rates. Perhaps not surprisingly major urban centres record high rates, whilst rural areas have a tendency towards low rates, but the high rate for Hyndburn and low rate for Sunderland reveal how other factors can affect the figures.

The Lancashire Perspective

At the District level some of the results appear somewhat volatile, but the seven-year period does reveal some noticeable patterns. Rossendale stands out as an area with consistently high vacancy rates and recorded the joint 10th highest rate in the country, but as mentioned earlier it is now Hyndburn that has the highest vacancy rate in the County, up four percentage points in one year. The latest figures also show Blackburn with Darwen, Burnley and West Lancashire also recording double-figure vacancy rates.

Ribble Valley, with a vacancy rate of 3% recorded the joint thirteenth lowest rate in the Country, whilst Fylde and Lancaster, both with 4%, also recorded rates well below the average for England.

In general terms, the Lancashire district rates reveal low levels in affluent areas (Fylde and Ribble Valley) and high rates in three neighbouring East Lancashire Districts that are not amongst the most economically affluent parts of the County. A high level of old manufacturing units perhaps unsuitable for modern needs may be a contributing factor to the high levels in the East Lancashire districts, but the results from other authorities across the county highlight the difficulty in relying on simple answers to explain what are a complex set of statistics. A clearer picture cannot be obtained without far more details covering such issues as the type, age, size, location, suitability and rental value of vacant properties.