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Calls for government to act as pressure mounts over rent payments

04 May 2020 by
Calls for government to act as pressure mounts over rent payments

With the next quarter's rent due in eight weeks and "90%-plus of landlords" still expecting full payment, pressure is mounting on the government to intervene as all sides put forward proposals.

The Treasury has said it is "listening to concerns" but appears to have dismissed a proposal from landlords for the government to step in to cover a proportion of rental bills.

Under the Furloughed Space Grant Scheme put forward by the Property Federation (BPF), the British Retail Consortium (BRC) and retail property body Revo, landlords would agree to a rent reduction for furloughed premises, with tenants would paying a proportion of the bill and the gap being filled by taxpayer subsidies.

The proposal was discussed with the Treasury and Ministry of Housing, Communities and Local Government last week, but the former has since that "any such scheme isn't being discussed as an immediate option".

Chief executive of the BPF, Melanie Leech, had argued: "The interests of property owners, their lenders and their tenants are aligned in asking the chancellor to introduce additional support measures."

Despite the recent government-backed financial packages for UK businesses, she said there remained a "real risk" businesses that were "fundamentally sound" pre-Covid-19 would not survive without further support.

However the proposed scheme was rejected by Jonathan Downey, chief executive of Hospitality Union and driving force behind the National Time Out campaign,, which calls for a nine months rent holiday for tenants, with a corresponding debt repayment holiday for our landlords.

Speaking to The Caterer he said: "The taxpayer isn't going to give cash to people who own large properties in big estates – I can't see that working at all when there are people living on £94 a week. I would have thought it was suicide." Downey also dismissed a claim from the Treasury that the majority of landlords were "working closely with tenants to find solutions that work for both parties".

He added: "That's definitely not the case. 90%-plus landlords are still expecting full rent, currently and going forward. They have only agreed to defer as they can't collect anyway. If it wasn't for the forfeiture moratorium, 70-80% would be suing now."

A spokesperson from the Treasury said: "We are currently engaging with the sector to better understand their issues and the impact of the current schemes we have in place. We've been clear that we'll keep all our schemes under review."

Meanwhile retail landlord Intu said it would "absolutely" welcome the Furloughed Space Grant Scheme. Speaking to The Caterer, a spokesperson said it had been involved via Revo and the BPF and believed the scheme "would benefit the retail and leisure industry and offer much-needed support to landlords".

"This is a very difficult time for everybody, and we have had lots of conversations with our hospitality customers. Any help we are providing is on a case-by-case basis and includes significant reductions to the service charge and moving to alternative payment terms, including monthly rents," the spokesperson added.

Intu said there were "a very small number of cases" where customers were "not engaging with us to find a consensual solution".

"These are large, well-capitalised brands who have the ability to pay but have chosen not to. In these instances we are prepared to take more robust action to enforce the legally binding terms of those leases," it added.

Simon Emeny, chief executive of Fuller Smith & Turner, which runs 215 managed pubs and hotels and 179 tenanted pubs, also urged both sides to work together to find an "equitable solution". He said: "To do this, we call on government to share the burden, that these unique times have created, with both landlords and tenants."

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