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Government must act over rent crisis to prevent ‘hospitality bloodbath'

14 September 2020 by

A "bloodbath" of hospitality business failures will follow the end of the moratorium on lease forfeiture and debt enforcement at the end of this month if action is not taken, the government has been warned.

UKHospitality has written chancellor Rishi Sunak and the secretary of state for housing, communities and local government Robert Jenrick warning that a failure to act could see thousands more jobs lost.

The trade body predicts that by the time the moratorium is lifted on 1 October, the sector's unsettled rent bill will amount to more than £1b.

UKHospitality chief executive Kate Nicholls said: "A huge economic shadow hangs over the sector; as things stand, later this month, many businesses will not be able to pay rent that is due. Landlords will be able to take back the keys and thousands of sites and the jobs they support will be lost.

"More time is needed to come to agreements. A moratorium that goes on until the end of March 2021 will allow businesses to trade through Christmas and New Year. With the ‘rule of six' in place, that period is undoubtedly going to be tough but at least should generate more cash than had been possible in the closure period, putting tenants into a stronger position to repay debt accrued.

"While the hospitality sector has suffered through this crisis, we appreciate the landlord community has too. We would be keen to work with government to build on our constructive partnership to ensure any future moratorium is targeted at those most in need and, potentially, conditional so that it brings parties together."

Earlier this month Chloe Benson, senior associate at law firm Goodman Derrick LLP, told The Caterer commercial tenants in arrears could be faced with the prospect of lengthy court proceedings or even property owners changing the locks.

Photo: Shutterstock

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