The Importance of the Local High Street: A Follow-Up in a Post-Pandemic Economy

Must-Haves Over Nice-to-Haves

Much like in 2022, people care deeply about their local high streets, having a preference for must-haves over nice-to-haves. Many of us would like to have boutique shops for fashion or home décor nearby, but not at the expense of a local GP.

In fact, the top three most important services have largely remained unchanged in recent years. In 2022, having a post office on their local high street was the most important to our respondents. This was followed by supermarkets, and GPs/dentists/opticians.

In 2024, supermarket(s) (including mini/local/express supermarkets) took the top spot, with 91% deeming them either as essential or important. Healthcare hubs came next (90%), followed by a post office (89%).

Given what we’ve seen with these three crucial services in recent years, it’s understandable that they’ve ranked so highly once again. While deemed essentials, the reality is that they’re often sorely lacking from our communities.

Each and every region in England and Wales has seen a fall in the number of post offices in the last two decades, with 6,700[8] disappearing from our high streets during that period. Even more closures may be on the way too, as the Post Office recently revealed it was aiming to offload 115 directly-owned branches within its network[9].

Also, as of late 2023, there were just over 6,300 general practices in operation in England[10], the lowest level seen since at least December 2016. Moreover, there was a net reduction of 670 pharmacies in England between 2015 and 2022[11] and by December 2023, eight out of 10 dental practices were not accepting new NHS patients[12].

Fortunately, the supermarket industry has fared fairly well in recent years. Consumers still prefer to do their grocery shopping in store over online[13], and some of our biggest grocers are planning to expand in the local convenience space over the coming months and years[14]. Still, in recent years “food deserts[15]” have emerged in certain struggling local economies, where residents are in desperate need of more produce.

A Clear Need to Focus on Demographics and Regionality

For property investors, this should all provide food for thought. Knowing what consumers want to see on their local high streets could steer their investment strategies. The highest-ranking assets such as supermarkets could prove beneficial for any portfolio.

Although, in regions where there are already abundant choices, it may be better to focus on the more niche commercial assets. These may have smaller markets, yet could still prove profitable. Fortunately, there are many different types of assets which hold potential:

What makes a good local high street?

• 91% – Supermarket(s), including mini/local/express supermarkets
• 90% – GP/dentists/opticians
• 89% – Post office
• 77% – Convenience stores that are open late
• 70% – Hairdressers/barbers
• 68% – Restaurant(s)/takeaway(s)
• 65% – Café(s)/coffee shop(s)
• 61% – Pub(s)
• 42% – Gyms/fitness studios
• 34% – Boutique shops for fashion or home décor/furniture

Emerging preferences in 2024

Our results also show that it’s worth focusing on local demographics, and regional trends. There are some clear preferences emerging in the property market, and those who can get ahead of them could do very well in the coming months and years.

Younger generations, specifically, appear keen to get out there and consume. As they advance in their careers and improve their financial positions, property investors could take advantage as their economic clout grows.

For instance, 79% of those aged 18-34 deemed restaurant/takeaway establishments to be essential or important. For those aged 55+, it was only 58%. Similar disparities were seen with café(s)/coffee shop(s) (71% vs 57%), and gyms/fitness studios (70% vs 20%).

Property investors also need to carefully consider where they’re investing. Demand for certain assets across the UK is not spread evenly.

Some 73% of respondents from the North East deem coffee houses essential, or important. Yet in the North West – right next door – it plummets to 54%. In London, 64% are keen to have gyms and/or fitness studios on their high streets. But in the East of England – again, very close by – this drops to 28%.

Regardless of how property investors progress however, they need to get it right for both their sake, and the market’s. Since the start of 2020, the decline of their local high street played a role in the moving decisions of 17% of our respondents, rising to 34% for those aged 18-34.

Just over half (51%) of all our respondents said having a vibrant local high street is important for them when choosing where to live, and 78% believe the government should do more to support local high-street businesses.

The View of Our CEO

“The high street continues to face challenges in 2024 but, thankfully, we’ve now put the worst of the pandemic years behind us. What’s interesting to see is that in many ways, the health of their local high street is even more important to people than it was in 2022. Perhaps, after years of struggle and restrictions, consumers are keen to build back up their local communities.

“Indeed, some 28% will pay a premium to live near a great local high street – a slight increase on our previous survey. Interestingly, this figure rises to 40% for those aged 18-34, meaning there may be much potential in targeting younger generations as they come of age, and plan for certain milestones.

“However, we mustn’t lose sight of the difficulties that lie ahead of us. The economy has had two years or so to try and recover from the lockdown years, but progress appears slow. Over half (54%) of all respondents feel their local high street is far worse now than it was five years ago. Moreover, people of all ages, homeownership status, and gender want to see more efforts from the state to support our high streets.

“Fortunately, for property investors, there is no shortage of options when it comes to improving our high streets, and benefiting from them. As our results highlighted, consumers appear desperate for more of the essentials, but there is also opportunity within more leisure commercial sectors. Of course, residential investors can explore BTL homes near already rebounding high streets, and conversion strategies also hold plenty of potential.

“At Market Financial Solutions, we’re ready to support all these efforts and more. Across our bridging, BTL mortgage, and new Bridge Fusion ranges – we continue to be primed and ready to support property investors with their plans. Whether that includes investing in local supermarkets, converting an empty store into a more profitable business, or delivering more residential stock within walking distances of our incredible high streets.”