London: London’s world famous Hatton Garden jewellery area could become a thing of the past as a result of soaring business rates, rent rises and the consequences of the UK's Brexit vote.
Traders are battling rising rents and municipality costs, as well as the uncertainty created by the UK vote to leave the EU. Victoria McKay, chief operating officer of the London Diamond Bourse (LDB), said there is a real threat to the jewellery industry in London and the community of workshops could be forced out of the area, according to a report in Britain's Independent newspaper.
The London businesses have also been hit hard by the sharp fall in the value of the pound since the EU referendum on June 23 which has made diamonds and gold, which are sold in dollars, more expensive. Jewellers either have to raise their prices in the face of consumer resistance or absorb the cost rises.
McKay said, “Consumers don’t know what’s coming next and you can’t blame them, which has an effect on their expenses in luxury goods. While it’s commonly thought that businesses in Hatton Garden have a lot of money because they are known as the center of the UK diamond trade, it’s an industry that employs a lot of people and the uncertainty means that many in the industry felt that jobs could be under threat.”
Meanwhile, a review of business rates, or municipality taxes, will lead to average annual increases of over 23 percent over the next five years. And rents in the past three years have reportedly doubled.
The building in which the London Diamond Bourse is located has been purchased by a Singaporean investment company. The LDB's lease ends in 2019 and a recent vote of its membership of almost 300 traders found 92 percent supported moving to a new home.
