Rent stalemate 'biggest threat' to pubs if Government does not take action

By Emily Hawkins

- Last updated on GMT

Action required: UKHospitality (UKH) has urged the Government to introduce fiscal support to end stand-offs between landlords and tenants
Action required: UKHospitality (UKH) has urged the Government to introduce fiscal support to end stand-offs between landlords and tenants

Related tags Coronavirus

Government is being urged to give landlords and tenants financial support to prevent what UKHospitality (UKH) is calling rent stalemates.

In a letter to the Chancellor of the Exchequer and other ministers, UKH said businesses would go under and jobs would be lost if support measures were not introduced.

Suggested measures included tax credits to incentivise rent waivers; property bounce back bonds to cover lost revenue form the closure period; and the introduction of a furloughed space grant scheme.

The letter stated: “Essentially our view is that if a business is closed through no fault of their own, they should not be accruing any rental debt; and while trading well below general levels of business, there should be a vastly reduced rent, most likely linked to turnover – ‘no revenue, no rent: part revenue, part rent’.”

UKH added it was backing the proposal to introduce a code of practice surrounding rent​, which would encourage constructive negotiations between tenants and landlords.

UKH chief executive Kate Nicholls said the rent issue was the biggest threat to the recovery and rebuilding of the hospitality sector ahead of the 24 June quarterly rent day.

She said: “We are moving towards the reopening of the sector and many people, both in and out of hospitality, are keen to see businesses open again. Unfortunately, all the good work in keeping businesses afloat during lockdown and the best-laid plans for restarting, could be completely undone by the impasse on rents.

Call for action

“As things stand, when 24th June comes around, many businesses will not be able to pay. We have lost an entire quarter’s revenues to Covid-19 and the prospects for trading from July to September look severely limited. Social distancing measures and expectations of low consumer confidence are going to see businesses trading at a fraction of capacity.

The letter called for the current moratorium on forfeiture and enforcement action to be extended until the end of the year, so that the proposed code could support discussions.

Nicholls added: “The reality is, though, we are at a point where the Government has to step in and act decisively, otherwise businesses will go under, jobs will be lost, and rent will never get paid.

“Fiscal support is now the only option if we want to avoid business failures. The Government must consider supporting hospitality businesses who cannot pay rent. A continued stand-off does not help anyone.”

Related topics Legislation UnitedWeStand

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