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Small firms "stifled" by rents

Published On 14 February 2007 at 16:47:50

A property expert has claimed that increasing numbers of small enterprises are finding their business opportunities stifled by high rental fees.

Benjamin Smart, from Business Link for London, claims that many small firms in the capital are struggling as rents continue to soar, with those in inner city areas particularly affected, reports Growing Business.

"Businesses in prime locations are facing increasing costs, partly because there is less and less space due to a lot of commercial properties being converted into residential buildings," commented Mr Smart.

"As a result, they are pushed out to the more run-down areas, where they don’t make enough profit to pay for the cost of the property."

It is thought that three interest rate hikes since August have also been partly responsible for the recent rent increase, as landlords cover their increased mortgage payments with higher rent requirements.

Mr Smart asserts that obtaining a lease may be a better financial bet over the long term and that such a move would also offer greater security.

Many analysts are predicting further interest rate rises in the near future.

 

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