Analysts predict a rash of residential development above shops as owners take advantage of tax relief on the cost of converting the redundant space into flats. In his pre-Budget speech earlier this month, Chancellor Gordon Brown announced that VAT on conversion costs would be cut from 17.5% to 5% as part of a package to make better use of the UK's 1.3 million empty buildings. Mark Sheehan, national retail director for estate agents Christie & Co, said it was also "positive news" for retail property owners. Flats above shops were becoming more fashionable, he said. "But the initial costs of conversion can be too much for owners. This will make things easier and give them the long-term benefit of rental income." {{NEWS }}