A caf proprietor in the centre of York may have to shut after claiming he has received a demand for a 20 per cent hike in rent.

Bob McGregor, of Coffee Culture, in Goodramgate, says he may have to close in February after being told by his landlord's agent that his rent will be upped from £10,000 to £12,000 a year.

He said: "Last November, it increased by £500 from £9,500, so that since early November last year the rent will have soared by £2,500.

"That's outrageous, particularly as when I took over this 16th century building 18 months ago, the place didn't even have hot water. I have spent thousands of pounds making it fit for trading. I have increased the takings

substantially since then.

"I appreciate that a rent review was due, and I would have been perfectly prepared to pay up to four per cent extra, in line with inflation, but no business could stand the kind of increase being imposed.

"I simply can't pay it. What am I to do? Put up the price of coffee by 20 per cent? If the Government put up taxes by that amount, it would be voted out on its ear.

"I will have no option but to leave by February - and if I do, I shall take with me all the fixtures and fittings for which I have paid."

Mr McGregor claimed the rent review took the form of a visit by the agents, Waterhouse chartered surveyors, of Bootham, followed by inquiries with nearby traders to establish how much rent they paid.

"There was no consultation and no grounds given. The next thing I knew, I received a recorded delivery letter, not proposing, but telling me what the new rent will be.

"How can small independent businesses endure such rent increases when they also have to face steep rises in rates, utility bills and suppliers' invoices? It just won't be worth carrying on."

Landlord Frank Woolgrove said: "There is no comment from me. Please talk to my managing agent. But I will say that Woolgrove Ltd has never imposed a rent increase on any tenant which that tenant cannot afford, nor will it. As far as I am aware this increase is the first stage of negotiations."

David Waterhouse, of agents Waterhouse chartered surveyors, said the lease had been assigned to Mr McGregor by the previous tenant and the rent review was a normal transaction which happened every three to five years.

He said: "A colleague researched in Goodramgate and the rental value was below £12,000. We proposed £12,000 to allow some leeway for negotiation."

He said how much a tenant had spent on the premises could not be taken into account, in the same way the £1,200 the landlord had spent on improvements at Mr McGregor's request was not being taken into the reckoning.

Mr Waterhouse said: "We have had communication from Mr McGregor saying he would take advice and come back to us, but he had not yet done so.

"Meanwhile, there are mechanisms within the lease that if landlord and tenant cannot agree, it can be referred to a third party expert appointed by the

president of the Royal Institution of Chartered Surveyors."

Updated: 10:47 Thursday, November 24, 2005