The Not So Green Garden of Eden

In a recent article for The Conversation, we highlighted the massive decline in retail in the UK in between 2010 and 2017. In most local authority areas outside London, not only has the total amount of retail floorspace shrunk by, on average, 27.6%, but the rateable value (RV) of properties declined, as well. This is bad news for local authorities, who are forced to rely on business rates for an increasing proportion of their revenue.

But there’s an exception. At first glance, Eden District bucks the trend with a significant increase – about 29% – in retail RV. In this map, it shows up as a large green expanse in an otherwise economically barren country.

Change in aggregate Rateable Value (£) 2010-2017 by Local Authority

What’s going on here? Shall we all move to the Garden of Eden? 

The first thing to say is that physical size is a very poor indicator of economic importance. Eden District is mostly rural. The most significant settlement within it is Penrith, with perhaps 15,200 residents.

But it is close to the heart of the Lake District. Could this be the key to its success? Perhaps the fall in the value of the pound post-referendum has brought tourists back to the Lakes, to spend their holiday money in Penrith’s gift shops and invest in new Barbour jackets?

With further investigation however, it looks as though the real story here may be quite different.

The total amount of retail floorspace has actually declined slightly in Eden. And while the average RV has leapt, the median RV has slightly declined as well (that is, the value in the middle, if you list them in order of size). It doesn’t seem to make sense.

Looking at the distribution of values, though, gave us a different picture. Most retail businesses in Penrith have a rateable value below £50,000. In 2010, only 22 businesses had a greater value, and in 2017, there were only 21.

But in 2017, the contribution of these very high-value units was much greater: in 2010 the 22 highest-value properties were rated at £2,865,000 – or 37% of the total in Eden District. In 2017, the 21 highest-rated properties were worth £5,646,000 – 57% of the total! The actual size of these properties changed much less: 45,917m2 in 2017 compared to 40,531m2 in 2010.

Penrith retail stores with the highest rateable values, £ per m2 (2010 and 2017)

Let’s have a closer look at the distribution of these very high-value properties across the District in 2010 and 2017. All of the high-value properties were in Penrith itself (see map above) and all were, as you might expect, very large. But when we take into consideration the RV per m2 of these properties we can see a clear shift. A handful of very large, and very highly-rated, retail units have been added to the total stock since 2010. Penrith, and Eden as a whole, hasn’t undergone an economic transformation; but these few units have been enough to drag the totals upwards.

Further research

As property analysts, R3 Intelligence could follow up these findings with further research. For example, does an increase in high-value, larger stores affect the prosperity of the rest of the high street…  or could these larger stores be more vulnerable to closure due to their higher business rates bill?

Contact us or leave a comment to share your suggestions. 

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