Seeking small green shoots

The Bank of England announced in September that lending to business fell £8.4bn in July. The news came at the end of a summer of conflicting financial data and added to the ongoing pressures on the UK's high streets.

The timeline of summer statistics started with figures from Halifax, which showed that housing prices across the UK increased by 1.1% on average in July; the seemingly good news was tempered by year-on-year figures shrinking 12.1%.

On 12 August, the Bank of England's quarterly inflation report stated that "there were more encouraging signs looking ahead" but also reported "…in the UK, the recession appeared deeper than previously estimated and gross domestic product fell further in the second quarter of 2009."

Jobless increase

On the same day, the Office for National Statistics announced UK unemployment figures of 2.43m people in the three months to June, up 750,000 from a year earlier.

Just when the negativity was becoming overwhelming, a day later, Eurostat - the statistical office of the European Community - announced that the recession was over in France and Germany. Both countries saw their second quarter GDP grow by 0.3%, although the figures still represented a fall of 5.9% for Germany and 2.6% for France year on year.

Back in the UK five days later, the Consumer Prices Index annual inflation rate was unchanged at 1.8% in July, confounding economists' expectations of a fall.

Retail sales in July rose 3.3% compared to the previous year and the Institute of Chartered Accountants' Business Confidence Monitor reached positive territory. Michael Izza, chief executive of the Institute of Chartered Accountants in England and Wales, said: "This quarter's BCM suggests that the UK recession is at an end. While there is no doubt that the economy is on its way to recovery, we shouldn't underestimate the business challenges ahead."

Up and down the country, high streets have been damaged by shops closing and companies entering administration and liquidation. High-profile cases such as Zavvi and Woolworths made the news but research by the Local Data Company has shown just what the drip-drip effect of closures has been.

According to LDC's report, Broken Teeth Faded Smile, town centre shop vacancy rates in England and Wales had risen to almost 12% at the end of June, compared to 4% for the same period in 2008.

Matthew Hopkinson, director at LDC, wrote in the report: "Among the large centres, worst hit appear to be the big regional centres in the north and midlands with Derby, Liverpool and Leeds all seeing over 20% of their shop capacities vacant. Although town centres have seen significantly increased vacancies over the last six months, this was the continuation of a trend that started in the middle of 2008 as the credit crunch began to bite."

Vacancy warning

Andrew Miller, manager (risk control surveyors) at Allianz Commercial, said: "Retail vacancies increase the risk of vandalism, crime and illegal occupancy. As such, it is essential that building owners ensure that their buildings are properly secured when unoccupied."

Further research from LDC in September found discount stores bucking the trend, with the UK's top-ten cities seeing a 60% increase in their numbers over the past two years. Meanwhile, for every discount retailer that closes nationwide, two more open.

Swinton's head of personal lines marketing, Mark Hallam, said the broker is going against the flow of closures by opening three high street branches in July and August and that it is committed to supporting local communities.

There have been many issues raised by the recession and there are many challenges to meet. Whether we are out of the recession or not, the high streets will take a long time to recover. Hopefully brokers, working with landlords, can play their part in helping ensure that the risks brought up by vacant properties are being assessed.