Shop rents fell 1.5% in the year to June and the trend is expected to continue as government efforts to slash the deficit hits consumer confidence.
According to the Colliers International midsummer report, high street shop rents are expected to slide more than 4% this year. The anticipated fall follows a period of stability in recent months after the sharp declines in the recession.
The 1.5% dip this year compares with an 11.5% slump in the same period last year.
The survey revealed that performance varied from town to town, with rents in Guildford rising 16.7% and those in Dunstable slumping 45%.
Colliers expects the proportion of empty shops to increase from 10.7% to 11.4% this year.
Russell Francis, head of valuation at Colliers, told the Financial Times: “The retail market, having weathered the recessionary storm reasonably well, was even starting a modest recovery, but is now faced with further pressures. The rental recovery is therefore back on hold for at least another 12 months.”
Francis said the Government’s drive to cut costs would lead to the trend continuing: “The consumer who for so long has supported an unbalanced economy is now being hit from all sides with tax increases, be they direct or indirect, and price increases, squeezing disposable income.”