Government urged to cover half of unpaid pub rent

By Emily Hawkins contact

- Last updated on GMT

Urgent action needed: the group of trade bodies said the Government must intervene to protect businesses and jobs
Urgent action needed: the group of trade bodies said the Government must intervene to protect businesses and jobs

Related tags: Coronavirus, Property, Rent, ukhospitality

A coalition of trade bodies representing landlords and tenants within the pub sector has called on the Government to introduce a grant to help solve a growing rent crisis.

The British Property Federation (BPF), British Retail Consortium (BRC), Revo, ukactive and UKHospitality have outlined their proposition for a ‘Property Bounceback Grant’ which would cover half of business's unpaid rent.

Many publicans have been unable to pay their rent in full after months of closure, a hit to consumer confidence and safety limitations on numbers. This level of debt has left many pubs in a precarious position, with hundreds of thousands of jobs at risk, the trade bodies said.

The organisations said it would cost the Government £1.75bn to pay half of unpaid rents across the retail, hospitality and leisure sectors for just six months, it would cost £1.75bn. It predicted the Treasury would see a tax revenue return on this investment of £7bn, with 375,000 jobs potentially saved. 

Footfall down

The total return would top £11bn if the Government covered businesses that had already reached rent payment agreements, for a cost of £4.7bn.

The grant would involve covering up to 50% of rent and service charges between March and September and be conditional on the landlord and tenant agreeing to account to the remainder through the Government’s code of practice.

It would focus on businesses that were hardest hit by the pandemic and those closed for the longest.

In a joint statement, the trade bodies said:“Many retail, leisure and hospitality businesses across the UK have been closed for months. Even where they have reopened, footfall remains down significantly on pre-coronavirus levels.”

Landlords have been “walking a tightrope” and many could not afford to sustain losses of the scales involved, the organisations said. Eviction protection for commercial tenants unable to pay their rent has been extended until 30 September.

Imminent risk of failure

The trade bodies added the surmounting debt was an issue for the Government otherwise many businesses and jobs could be lost in the months to come.

They concluded: “Without urgent action on rents, many otherwise viable businesses are, through no fault of their own, at imminent risk of failure. Where both landlord and tenant are able to cover at least 50% of the rent owed, and are able to demonstrate they are working together as economic partners, government should have the confidence to invest in these businesses’ futures and prevent the needless loss of hundreds of thousands of jobs.”

The Government published its code of conduct for landlords and tenants discussing rent negotiations in June.​  UKHospitality chief executive Kate Nicholls welcomed the code but said it "must be recognised as a first step that needs to be built on by all parties."

Related topics: Property law

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