“God save little shops,” sang the Kinks on their 1968 single The Village Green Preservation Society. More than half a century later, that wish lives on for the founder member and guitarist Dave Davies, who is fighting to save a historic shopping arcade near where he grew up in north London, which is expected to be demolished by developers and replaced with high-rise flats.

The still-touring Davies has stepped into a battle being repeated across the UK as investors seize on struggling high streets in towns and suburbs that have been battered by online shopping and rising business rates, and seek to turn them into housing.

Policymakers believe a crisis last year during which the number of shops lying empty rose by more than 7,500 can be halted by turning them into homes. In the past five years, there has been a net loss of more than 1,000 independent shops, according to the Local Data Company (LDC).

Davies, 72, joins those who fear the changes risk ripping individuality and identity out of local communities. He is backing calls to save the art deco Grand Arcade in North Finchley, which was a short trolleybus ride from where he grew up in Muswell Hill with his brother Ray Davies.

Its eccentric row of shops once included a music store where Davies bought guitar strings. Now there is a jeweller’s, a bric-a-brac shop, an immigration lawyer, a craft shop and a photo studio. All this is facing oblivion despite the government’s heritage body, Historic England, declaring the 1937 building “one of the highlights of the town centre”.

Davies: This sort of place brings people together.’ Photograph: Sarah Lee/The Guardian

Speaking on a visit to the arcade last week, Davies said: “Little shops matter because people matter.

“Feelings are attached to things, not just people. Certain clothes in little shops. It’s more personalised, more individual, more quirky. You get more unusual things. Some people don’t care, but I do. Ray was right about it before anyone else on the Village Green album.”

The net number of store closures on Britain’s high streets has increased every year since 2015. In 2018, London had the greatest number of closures, Scotland had a net loss of 119 stores, and there was a 10.5% increase in closures in the north-west, according to the LDC.

But sometimes the stores are taken over by other occupants. At the Grand Arcade, the Art Against Knives charity has occupied what was once the music shop, in an attempt to encourage vulnerable young people off the streets with music production sessions and a nail bar.

If places such as the Grand Arcade go, “we lose personality and individualism”, said Davies, as he riffled through LPs by Doris Day, Shakatak and Felix Mendelssohn in the Green Room charity shop.

“I think we are at a time now when we need to celebrate individualism rather than trying to make everything the same,” he said. “This sort of place brings people together. I think about new people or immigrants moving to the area and they would love to own a little shop rather than being stuck in a big box.”

The local planning strategy calls for the building’s replacement with up to 12 storeys of flats and offices above shops. It cites “tough economic conditions and changing consumer habits” as altering the face of the high street, and suggests more leisure, office and residential uses.

According to council papers, the private developer, Joseph Partners, funded the creation of the planning strategy, contributing £140,000 towards salaries.

A spokesperson for Barnet council said of the arrangement: “Although funding was provided privately, which sometimes happens with master plans and SPDs [supplementary planning documents], the work was led entirely by Barnet council planning officers, following normal due process.”

Jonathan Joseph, the company’s head, denied there was any conflict of interest. He said Joseph Partners had no say in the recommendations to demolish the arcade and said the jury was still out on what would happen, with a consultation on detailed plans to start next month.

“Is it a pleasant piece of architecture? Yes. Is it historically important? No,” he said.

Ian Dunn, a local graphic designer who is campaigning to save the arcade, said: “This is a unique part of North Finchley. You have to have a bohemian funky place like this for people to express themselves. It can’t be all coffee shops. All we have up here now is McDonald’s and KFC and their litter all over our floors.”

Mukesh Rathod, who runs the 21-year-old Gold Leaf jeweller’s, said the council’s suggestion the arcade was struggling was “rubbish”.

He added: “There is no need to close this. It’s all very well having the big shops like Next and Primark, but if this goes they won’t survive because the arcade brings people here.”

Marissa Ajapidi, who runs Recycled Inspirations, an arts and crafts shop, said she was so busy she was expanding into the neighbouring unit. “It’s crazy,” she said. “This is something totally different.”

Davies with Noel Lynch, the owner of the Green Room, a curiosity shop in the arcade. Photograph: Sarah Lee/The Guardian

‘We’re getting on OK’

Ray and Dave Davies, the fraternal driving force behind the Kinks, are back in tandem after decades of animosity and have produced a large number of new ideas for songs, some of which are “really good”, Dave Davies has said.

The band’s pioneering lead guitarist, who is now based in New Jersey, has been in the UK working with his brother. “Me and Ray are talking. Or talkingish,” he said.

It has been enough for the pair to write together again, 55 years after they changed the face of pop music with You Really Got Me, which introduced a new distorted guitar sound achieved by repeatedly slashing the paper cone of Dave Davies’ £10 guitar speaker with a razor blade. They subsequently fell out repeatedly – including over who wielded the blade.

“I’ve been working with Ray,” said Dave Davies. “We’ve been working on some ideas. There’s a lot of it. Some of it is OK and some of it is really good and needs tarting up, knocking into shape as it were.

“It’s going OK. We’re getting on OK, that’s the main thing. He can be cheeky. He wants what he wants. It’s just brother shit. When the music works, everything else is sod it, it will be all right.”

The Kinks are rereleasing their 1969 album Arthur (Or the Decline and Fall of the British Empire) in October, but there is no schedule yet for the release of any new material. Less than three years ago, Dave Davies described his 75-year-old brother in an interview as “sly, manipulative and nasty”.