GUY SPY #01: Could 100% Mortgages Save the High Street

Updated: Dec 3, 2019




Our new series of articles, Guy Spy, shares the views and opinions of GSM founder and industry expert Guy Symmons, on all things finance. Today, Guy explores an idea that may help the high street.






At the end of last year, Mike Ashley proposed a 20% tax on businesses whose online sales accounted for more than 20% of their revenue. As you can imagine, this wasn’t met with much support from retailers and MP's, but his prediction that the high street won’t make it to 2030 did sound alarm bells. Although this tax may not be the solution, the fact remains that high street retailers are facing crippling rents and the crippling business rates associated to these rents, which online operators simply do not have to balance.


We have seen many retailers successfully adapt to the online revolution, however many have also failed to keep up, with almost 6000 UK stores closing in 2018. Fierce online competition in addition to increased rent and rates proved too much for some retailers to remain profitable, even for former retail giants Toys “R” Us and Maplin, the latter interestingly is planning to return as an online-only business. The major issue is that landlord’s rent reviews are only ever upwardly, which in turn leads to higher business rates, both out of the control of high street operators.



One option perhaps, is for retailers to return to the old model of owning their own freehold and so dictating the business rates they face, becoming masters of their own destiny. Property prices like rents are also continuously inflating, so for this model to function the market would need to see the return of 100% mortgages being offered by banks to proven commercial operators.



Retailers could then combine these mortgages with asset finance to fund the fit out of a premise or any equipment purchases. Creating a complete finance package that is affordable and controllable to best prepare them to compete online or compliment their online offering. GSM are able to help retailers find the right financing to suit their business needs, whether they operate on the high street, online or a combination of both, arranging asset finance from shop fit-outs to logistics and IT.


Will this be enough to save the high street? It’s not certain but one thing is for sure, retailers need a helping hand to prevent Ashley’s gloomy 2030 prophesy coming true.






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