Property trade associations have argued a moratorium on business evictions must come to an end, despite the hospitality industry calling on the government for more help.
In April, Downing Street introduced a moratorium on business evictions which ends on September 30, shortly after the next quarterly rent day where tenants have to pay for the next three months’ occupancy.
The initial move was aimed at helping pub and restaurant owners, as well as other firms, ride out the virus crisis.
While some tenants agreed six-month rent holidays with landlords, many have not and now fear they will be unable to pay the outstanding rent, after suffering three months of closure in lockdown.
Trade body UKHospitality has written to the Chancellor and the housing secretary warning that failure to act urgently to solve the rent crisis will trigger a “bloodbath” of hospitality businesses failures and thousands more jobs lost.
The letter calls on the Government to look at measures, including extending the moratoria until March 31 next year.
Charles Begley, executive director of the Westminster Property Association, said: “From the outset we have advocated negotiation, not litigation, as the way through this crisis and the majority of landlords have taken unprecedented steps to help support their tenants. It is in everybody’s interests they survive and remain tenants long into the future.”
Begley added: “The moratoria worked in the short term as a blunt tool to provide certainty in the immediate aftermath of lockdown. However, a minority, including some well-funded corporate tenants which have continued trading, have abused the process to the detriment of those which genuinely need assistance. As the economy continues to open a more flexible process needs to be found which prevents such abuse.”
Melanie Leech, chief executive of the British Property Federation said: “Responsible property owners do no want empty stores – they want thriving businesses and communities, and they will continue to support businesses in genuine distress as a result of Covid-19.”
But Leech also said: “The moratorium, however, must come to an end as well-financed businesses have been exploiting the government intervention to avoid paying rent, when they are indeed able to pay, and this puts at risk our sector’s ability to support vulnerable tenants. For many, extending the moratorium will simply mean growing the volume of rent arrears, and this debt is already at unsustainable levels.”
In August retail, restaurant and landlord lobby groups called for a Property Bounceback Grant, which would see the Government fund up to 50% of rent and service charges owed. Failing that, retailers and restaurants want an extension to the moratorium.