Commercial landlords were left fuming while tenants rejoiced at the prospect of the Government extending rules banning them from evicting those unable to pay the rent.
A moratorium on business evictions, introduced by Downing Street in April to help retailers and restaurant owners forced to shut sites for the lockdown, had been due to end on September 30 but the Government was today reported to be looking at prolonging it to the turn of the year.
Landlords and their tenants have been at loggerheads over any extension. While some have agreed six-month rent holidays, many have not, leaving tenants fearing they will be unable to pay the looming outstanding rent bill.
Trade association UKHospitality estimates hospitality companies owe £760 million of unpaid rent.
UKHospitality boss Kate Nicholls said she would welcome an extension to the moratorium, first reported in the Financial Times: “It is very welcome news that the continuation of vital support measures is being actively considered and we urge the Treasury to confirm this as soon as possible to protect the greatest number of jobs.”
But landlords were appalled, claiming many tenants refusing to pay were big, profitable companies wrongly taking advantage of the crisis.
Vivienne King, boss of retail property organisation Revo, said the rules “have been exploited by some large well-capitalised retailers to withhold rent and any extension will put property owners under severe pressure”.
Scott Parsons, regional managing director UK & Italy at malls giant Westfield’s owner, Unibail-Rodamco-Westfield, said: “Extending the evictions ban to the end of the year is not the solution, but simply dragging out urgent issues that need to be addressed and resolved sooner rather than later.”
He said eviction is a tool of last resort, “however it is one we will be prepared to use with parties that have an ‘all take and no give’ approach. Our firm strategy is to work collaboratively with our retailers to reach a fair and positive outcome for all, especially smaller and local operators who are most in need of help”.
Lawrence Hutchings, chief executive of Capital & Regional, which owns shopping centres in areas such as Walthamstow and Wood Green, said: “We are supportive of help for small and independent retailers, however we feel that large, well-capitalised and profitable retailers should be meeting their contractual obligations.”
Hutchings added: “We would prefer legislation is changed to reflect that, and only protect those genuinely in need.”
The British Property Federation’s Melanie Leech said the majority of property owners and tenants are already working well together. But Leech added: “The moratorium, however, must end as it continues to fuel the non-payment of rent among large, well-capitalised businesses who can indeed afford to pay their rent.”
High Street chains have had some respite from the lockdown’s impact on revenues since non-essential stores have been allowed to reopen, while the Eat Out to Help Out scheme helped restaurants.
But many are still battling lower footfall in city centres as tourists and office workers stay away.
Retail industry sources were relieved the September 30 date may be pushed back but concerned over the length of the extension. “It may not be long enough to force landlords back to the table,” a source said.
Caffè Concerto director Stephano Borjak said the move would help some businesses to survive.
Rob Pitcher at Revolution Bars said: “Whilst an extension to the moratorium is very welcome, if not essential, to prevent widespread job losses across the hospitality and retail sectors, it needs to be accompanied by real financial support for both commercial landlords and their tenants.”
A Government spokesperson said: “We recognise the huge challenges faced by commercial tenants and landlords during this period and we’re working closely with them to ensure they are supported. We continue to urge both landlords and tenants to find solutions that work for both parties and we published a Code of Practice in June to support these negotiations.
“We’ve taken unprecedented action to protect jobs and livelihoods, with a package of around £160 billion of support, including loans, rates relief and grants for businesses.”