So long, Soho: Starbucks and Stradas are taking over London’s most characterful district

Synonymous with sex clubs, coffee shops and the music business, for decades it was London's most decadent quarter. But its bland makeover is symbolic of what's happening to high streets all over Britain, finds Nick Hasted.

Soho is London's bohemian heart. Britain's pop industry was born there, the film industry was run from it, and Foyles led the bookshops filling Charing Cross Road. Prostitutes lined the streets until the 1990s, when it became London's gay thoroughfare. Late-night drinking dens and cafés served them all in a sometimes sleazy but potent atmosphere. But now, in a pattern repeated in similarly cherished neighbourhoods across Britain, the independent businesses which dominate its warren of streets are suffering. Blander public taste, corporate encroachment and pre-Olympics paranoia have put Soho under siege.

Other cities face similar battles. In central Liverpool, Peter Tierney, owner of Quiggins, the much-loved, multi-warehouse home to alternative music and clothes shops, resisted its redevelopment for four years. But a 150,000-signature petition and numerous appeals couldn't stop its demolition in 2007. In Manchester, areas such as Chorlton have seen artistic residents forced out by rising rents, in favour of pricey, 'fake bohemian' businesses. Last April's riot in Stokes Croft, Bristol, partly sparked by anger at a Tesco Express opening despite fierce opposition, suggests a general public frustration at unasked-for corporatisation.

In Soho, most blatantly, the massive expansion of Tottenham Court Road Tube as part of the Crossrail project looms on its edge. This has led to the Astoria, central London's only major rock venue, being demolished. In the surrounding streets, new dead ends and rubble regularly appear. Chris Carr, a music PR who has worked in Soho since the 1970s, remembers when the music industry did informal business in its pubs. He raised a last brandy in one, the Bath House, the night before it was flattened in 2009. Offices and corporate brands are planned in its place. "There's this belief that Soho will survive no matter what," Carr says. "I don't think it will much longer."

Nearby, the menu display above Greek diner Jimmy's yawns open. The Soho institution shut four months ago. Leicester Square, London's cinema hub, is almost impassable as renovation accelerates to meet a summer deadline. "It's an Olympic clean-up more than anything else," says Phil Barton, owner of local record shop Sister Ray, of the polish being applied to the area. "They are so worried about some diplomat from Paraguay coming in and getting clipped by a Soho call-girl. There's obviously been a political directive." Just off the Square, a shut restaurant's forecourt has become an open skip. In the dingy 18th-century terrace St Anne's Court, by contrast, another boarded-up building promises a boutique hotel, replete with 'rainforest spa'.

In Denmark Street, home to musical instrument shops and the 12-Bar, a crucial club for new musicians, Crispin Weir manages the guitar shop on the site where the Kinks and the Stones made their first records. Like Carr, he fears the worst. "They're going to 'clean up' the alley where the 12-Bar is. For 300 years this was one of London's roughest areas, and they want to make it pristine and sharp-fronted. But you need a bit of grime. It's real, it's what this place has always been. Post-Crossrail, they're predicting 100,000 daily visitors. That gets the attention of big business and the chains. They'll get in as close as they can. Then you could be in Croydon. You could be anywhere."

Weir says his landlords are sympathetic to the street's character. But he views rent rises which will force out its tenants as inevitable. "It would make me very sad to one day see this being a Starbucks, with a plaque saying, 'The Stones recorded their first album here'."

Over in Berwick Street, where fabric and record shops dominate, the property company Shaftesbury is busy buying and developing. Their website approvingly notes of the street that "although at the heart of Soho ... buildings and the public realm are dilapidated ... and as a consequence rental levels are modest."

Shaftesbury chief executive Brian Bickell offers a more benign agenda. "We avoid the high-street chains like the plague, no matter what rent they offer. We encourage independence and the traditional uses there, because that's why people go."

He envisions a roomier, pedestrianised, more continental Soho. At the south end of the street with its run-down market, Shaftesbury have been true to Bickell's word, with new fabric shops which in their colourful brightness and genteelly hip clientele stand in almost blinding contrast to their neighbours. The seediness Shaftesbury see as an investment opportunity, the odd corners and characters Soho is home to, appear at odds with the landlords' upmarket ambitions.

"Soho's big enough that you can get Bar Italia, which has been going since the 1940s, next to some smart new restaurant," Bickell contends. "We respect the past and why Soho is what it is. But you don't want some guy dealing drugs on the corner. That's a bit too edgy for most people. People want better quality when they go out shopping or eating now. You can't freeze it in time and pretend it's the Soho of the 1950s. Life's moved on."

"People view the Soho of the 1950s and 1960s through rose-tinted spectacles," Alistair Moss, a councillor on Westminster's planning sub-committee, agrees. "People don't want Soho sanitised. But they don't want it drug-ridden and sex-crazed. There's nothing positive about street prostitution, or tourists getting mugged."

"I don't feel in danger of my life walking down the bottom of Berwick Street any more, but there's not much character there," considers Gary Robertson at the street's landmark record shop, Sister Ray. "Yeah, they've cleaned up the human faeces," deadpans Phil Barton, the shop's owner for 25 years. "We've become more anodyne as a society, anyway. Probably people who come from Peterborough still think Soho's really edgy. But isn't it happening everywhere? All the funky places are being Starbucked. Most cities in the world don't have a place like this now. There's no way Shaftesbury are going to be [that] benign. There's no way they'll put the rents down. And once rents go up, indies leave because they can't pay them, and because they don't fit any more."

Charing Cross Road, once a street of bookshops, has just six now. Foyles is about to move from its century-old premises into the nearby block abandoned by Saint Martins College of Art. Who succeeds it in its rambling old home remains a worry. Tatty short-term leases dominate its side of the street. TK Maxx has replaced the failed Borders chain, reflecting book trade problems.

But other factors are squeezing the bookshops which remain. Quinto has been moved down the street by its landlord Soho Housing Association, replaced by a Patisserie Valerie. The rent this chain casually pays is pressurising its neighbours. "Our rent just rose by 10 per cent," says Gino Della-Ragione, long-time owner of Henry Pordes Books. "They tried for more. They said, 'Patisserie Valerie pays...'." Soho Housing Association's commercial director Jeremy Eveleigh states: "It's not our business to subsidise commercial properties. But the problems we had with the bookshops over rent have been resolved."

Quinto's manager Zoe Taylor considers the shops' deeper worth. "We get old gentlemen coming into central London every few weeks. They spend time talking. They get comfortable. It's a kind of community." At Maison Bertaux, which has baked pastries on its premises since 1871, they feel the same. "People have a history in the shop, with the experiences they've had here," says Miss Wade, who prefers not to give her first name, and with her sister took the shop over from the Bertaux family.

"I've got one customer on a Saturday morning who's 94, and her great-grandmother used to come here in 1873. A gentleman whose relative committed suicide comes here to talk. That's a secret, extra lining people can't really define. It's difficult to keep going sometimes. But the shop was founded by Communards. We'll always fight."

Such shops are helped in Germany and France, where rent and retail use remains controlled. "In Paris," Taylor notes, "[legendary bookshop] Shakespeare & Company is protected. Here, it's the free market or something. But I'm sure they could make laws." Instead, in Britain a sort of planning anarchy prevails, favouring the powerful. "The planning inspectorate will not back us up if we say we want a particular owner," Alistair Moss explains. "The law's attitude is that people should not be interfered with in the use of their properties. An Englishman's home is his castle." But it seems it's only a castle for landlords.

Gaby's Deli has become a lightning rod for wider disaffection. Run on Soho's edge by Gaby Elyahou since 1965, it remains very popular, serving cheap, filling meals to a loyal clientele. Matt Damon's is among the signed testimonials on its walls. Now landlord the Marquess of Shaftesbury's Gascoyne Holdings want it gone, preferring, their agent Montagu Evans told the Evening Standard, "a tenant similar to the calibre of Strada or Côte". Westminster passed the plans. Gaby's theatreland customers' anger has been shown by protests staged in the premises by Simon Callow and others. Boris Johnson and mayoral rivals Ken Livingstone and Brian Paddick have reached rare agreement in support. The deli is clearly wanted by its local community, with a character which, built over 46 years, is irreplaceable. And yet, it seems doomed.

"It hurts the customers," Elyahou tells me. "Because they've been coming here for many years – grandfathers and fathers and children. People got married here. I like them, by name. I can talk to them, like family. People want something different, like here. Everywhere you go there's a chain. Everywhere looks the same."

Elyahou's nephew, Menahem Kojman, who cures the salt beef and makes blazing-hot chilli sauce no corporation would pass each morning, sits with me at the deli's back. "They will be happy to be rid of us," he says. "They will [probably] increase the rent tremendously [once we're gone]. They want to develop this whole section of the street, then they can charge £200,000-300,000. We can't do it. We can't charge £20 for a salt beef sandwich. A lot of people say they haven't seen this sort of campaign before – really strong. But it's not really for this business. It's to show the public and the people who like individual food that they don't have a choice. At the end of the day, the developers will tell you where to eat. This is what's upsetting." Gascoyne Holdings did not provide a comment.

Soho won't die, Moss, a resident as well as councillor, believes. "There are still third-floor tailors, and people living alternative lifestyles. It has narrow streets. Short of wholesale demolition, it's never going to change dramatically." But most businesses I spoke to grimly refused to look past their current lease. Soho's historic lights and links with its past are hanging on, or being snuffed out.