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Railway arches thriving economy under threat by Network Rail rent hikes, government is warned

PUBLISHED: 00:01 06 August 2018 | UPDATED: 08:12 07 August 2018

Derek Sansom at his Sara coffee shop under railway arches in Bethnal Green's Dunbridge Street. Picture: Mike Brooke

Derek Sansom at his Sara coffee shop under railway arches in Bethnal Green's Dunbridge Street. Picture: Mike Brooke

Mike Brooke

Derek Sansom is one of 8,000 traders signing a petition calling on the government to halt Network Rail’s “fire sale” of 4,455 railway arches.

Derek campaigning for Guardians of the Arches to protect railway arch tenants. Picture: Mike BrookeDerek campaigning for Guardians of the Arches to protect railway arch tenants. Picture: Mike Brooke

The 54-year-old owner of Bethnal Green’s Sara coffee shop under the Liverpool Street main-line is a founder-member of ‘Guardians of the Arches’ formed with the East End Trades Guild to stop rent rises up to 350 per cent ahead of the sell-off.

Their call to Downing Street comes as research by the New Economics Foundation is released today (Monday), revealing the businesses under arches contribute £725 million to Britain’s economy every year.

But they’re being priced out by Network Rail’s hyped rents before the arches sell-off in a £1.5 billion single deal.

“They’re putting rents up to ridiculous amounts,” Derek told the East London Advertiser. “Some of our customers were from motor trade garages along Dunbridge Street who have now gone because of 200 to 30opc rent increases.

Up for rent... another empty railway arch in an alley behind Bancroft Road. Picture: Mike BrookeUp for rent... another empty railway arch in an alley behind Bancroft Road. Picture: Mike Brooke

“Yet these arches are damp, often rat infested. To run a café in a place like this takes a lot of work with a dehumidifier.”

Derek, now into his second year of a three-year lease, signed for £25,000-a-year rent for one arch, with no right to stay after three years or even go to tribunal.

He added: “They’re making ridiculous comparisons to premises around Brick Lane which are proper retail shops, not damp arches.”

Derek needs to invest in extraction equipment for his coffee shop, but that isn’t viable on a short lease with no guarantee that he can stay on without 100pc rent hike.

Derek Sansom and his staff who run Bethnal Green's Sara coffee shop. Picture: Mike BrookeDerek Sansom and his staff who run Bethnal Green's Sara coffee shop. Picture: Mike Brooke

The largest rent demand the campaign has uncovered is 345pc—a 93-year-old mechanic running a garage for 60 years being told his annual £33,000 rent is up to £147,000.

Trades Guild director Krissie Nicolson said: “We need to preserve these spaces for entrepreneurs and the communities around them. Many arches have been ‘incubators’ for innovation, with affordable space—but small businesses are now being displaced.”

Today’s New Economic Foundation findings come as the four bidders still in the running to buy up the arches were due to submit their final bids.

The foundation’s Sarah Arnold said: “Small businesses in railway arches contribute to the local economy with their activities and supply chains they create.

“But all of that dynamism is under threat. Many have had to shut down or move out because of massive rent increases, often leaving arches vacant for years which doesn’t make sense.”

The mayors of Tower Hamlets and neighbouring Hackney have written to Transport Secretary Chris Grayling calling him to stop the sale. Hackney’s mayor has even offered to buy arches as an alternative to the whole lot going in one lump.

Transport Minister Jo Johnson agreed to consider any alternative after meeting a ‘Guardians’ delegation last month.

Network Rail is selling all 4,455 arches in one deal on a 150-year lease, to be completed by the end of the year.

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