Wednesday, 01 March 2017 09:53

Business rate rise will see landlords sell up

Business rates are going up. That’s a fact. No matter how the government dresses it up, rates are going to affect many, and it is expected that smallest businesses will be the hardest hit – no surprise there.

This can mean only one thing in our opinion, it is going to put far too much strain on the small shops and businesses on the high street and many have forecasted that the rate rise will decimate what is left of small businesses in London.

The Conservative government claims that it is the party of the people. That it represents the working population, entrepreneurship and will seek to help anyone who has a job and pays their way. Yet, in reality, what we are seeing is the first business rate rise in seven years. The rate rises are also expected to hit shops in London the hardest with things already at a premium anyway. It is also anticipated that high streets in the North of England, which are already struggling, will look even more dreary as businesses struggle to afford to have a presence.

We constantly look around our high street and wonder where it all went wrong. Of course, the digital age is a huge factor in the slow demise of the place where we used to all head for our shopping but the internet can only take some of the blame. Yes, because of convenience, internet shopping is far more popular than going out and browsing in shops; it is easier to pinpoint what you want and can be done in super quick time. But, a large portion of the blame needs to sit with councils and the business rates that are set. In a lot of instances, shops want to come to the high street and many small businesses want to make a go of things in a prime location but in both situations the rates are astronomical to the point whereby they can’t make it pay.

Instead what we are going to see up and down our land is town centres littered with empty stores. No prosperity, no passion and pride in the area where we live and many of these areas will be littered and rife with crime. Some areas will turn into ghettos and no go zones for ordinary, decent people.

You’d think that the government would want to help these centres and bring life back, and ultimately money, to the area. If business rates were lower, more people would want to rent the properties and this could turn the high-street round – ultimately creating jobs and in turn bringing more prosperity to an area. As it stands, it seems this is the final nail in the coffin.

What we believe could also happen is that the landlords of these properties may also start to sell up. Think about it. If landlords own these premises but understand that nobody can afford to rent them due to rate increases, the properties become somewhat worthless to them as they cannot make money from them. There could be a mass sell up of property – which may mean that that kind of property becomes cheap to buy but either way it is a sorry state of affairs that may result in us never seeing the high street as we remember it.

Going back to the London issue, it is expected that the damage done to the front streets because of the cost rise will be unrelenting and will mean that certain areas will not be the same again. Many property and finance experts have said that the damage done will be irreversible, will change the look of some London areas as people move out as they cannot make their business pay. They believe that small businesses make London what it is and the closure of these businesses will affect the whole feel of the city. 

The government has been quick to quash the claims that the rate rises are going to affect small businesses so drastically and has said that three quarters of businesses will still see no change in their rates and that it is only a handful of businesses that will be affected and, this still won’t be a dramatic amount. The government also claims that some small businesses will even see a drop in the rates. Only time will tell we guess.