It is our business!

Huge rent rises threaten our local shops each time they come up for review. But it is our local shops on the high streets such as those in Muswell Hill and Highgate that are the hearts of our communities. Without our local independent shops all we would have left would be the drab hand of centralising uniformity that comes with the big national chains, driving out the local vibrancy and variation that is the true heart of a local community.

A recent slew of rent rises has threatened the future of some of our favourite businesses in Muswell Hilland it was not that long ago the Raj’s corner shop inHighgate Village was under threat.

No one says that landlords should not raise rents when the five-yearly or whatever reviews comes around, but just sometimes you have to say that they appear to really push it – often to the point of pushing out the local independent business who has been a good tenant for years. Such businesses cannot always afford the massive hikes put forward and they decide to give up as the rent hike takes virtually all the profit they have struggled to make in a whole year’s workat a stroke – and we lose our long-serving and much loved community shops.

Contrary to a view I hear expressed from time to time about businesses coining it, most of the small businesses I know find it pretty tough to keep going against the ever-increasing burden of bureaucracy, costs and competition from multiples. Yes – there are those that make a decent profit – and good luck to them – but I bet most are just holding their heads above the water.

My Liberal Democrat colleague, Cllr Gail Engert has been out and about talking to some of the shops in Muswell Hill Broadway where there are a number of shops who are facing or have faced this problem. At Dod’s Newsagent, they had their rent raised from £14,500 to £31,500 in January 2006. And this is the amount that it was lowered to after they went to arbitration. But arbitration costs a lot of money, as you have to use specialists like surveyors in order to prepare your case – and Dod’s costs to go to arbitration were around £6,000. Another shop in Fortis Green underlined this point and said that they go through a rent review every four years and have to go to arbitration to get the proposed hike lowered. These little shops also have to pay high business rates for which they get very little service or say.

The loss of a shop providing a local choice of an important service is not only a tragedy for the local community but affects individual lives as well. The invaluable hardware shop, Bond and White, on Muswell Hill Road, will be closing on 31 July due to a huge rent rise and the demand for a new 25-year lease. This closure will result in the loss of 10 jobs for experienced staff.

You could take the view that it is a free market and if the landlord can find someone to pay more – then he is entitled. I don’t take that view. The market doesn’t work fully and effectively as many of the costs and benefits involved are not reflected in the market prices – for example if the loss of small local shops makes more people travel to big shopping centres, the congestion and pollution that can cause doesn’t get costed and included in the rent level negotiations for the small shops in the first place. Moreover, there has to be some fairness in the system – and the little businesses cannot pay the key money to get into the market or the high rents that the multiples can afford. That sort of obstacle to small businesses competing with large firms is another market failure, and that’s why we need policies to address them.

Two in particular appeal to me – landlords should be more willing to let small and new businesses pay a smaller proportion of their rent in advance, until the business and the cashflow builds up. In addition, just as we are used to the idea that property developers should provide some affordable housing when making housing developments, why shouldn’t shopping developments have similar conditions – if you get to make a big new retail development, part of the quid pro quo could be that you have to provide some affordable retail spaces. And in the cases of Muswell Hill and Highgate, please please Haringey Council finally learn the lesson – and properly consult with local businesses and residents before you next come up with parking plans in the area!

(c) Lynne Featherstone, 2007

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