The government has confirmed that the rent moratorium protecting commercial tenants from eviction for not paying rent, introduced last year in response to the pandemic, will continue until 25 March 2022.
MP Steve Barclay, chief secretary to the Treasury, delivered an economy update in the House of Commons this afternoon, confirming the moratorium extension. In the event of commercial negotiations being unsuccessful, tenants and landlords will enter binding arbitration.
He said: "All tenants should start to pay rent again in accordance with the terms of their lease or as otherwise agreed with their landlord as soon as restrictions are removed on their sector if they are not already doing so. We believe this strikes the right balance between protecting landlords and supporting those businesses that are most in need."
Kate Nicholls, UKHospitality chief executive, welcomed the measures and said the legislation will "form a strong bedrock for negotiated and fair settlements that can help heal the damage that the pandemic has wrought".
She said: "These are unprecedented measures but wholly merited and justified in these unprecedented times, bringing some stability back to an uncertain and unsettled property market. At last, this existential crisis for hospitality looks like reaching a fair conclusion, easing a path to recovery for a sector that can help the national economy back to prosperity."
However, Helena Hudson, managing director of the Real Eating Company, which runs seven cafés and coffee shops across London and the south east, said the move "only delays the inevitable unless this time is used to develop a long-term programme that introduces more actions to protect local high streets and small business owners".
She added: "The government needs to step in to force everyone to the negotiating table – landlords, business owners and local authorities – to keep our high streets alive for the medium and long-term."
Anxiety was growing among hospitality businesses, some of which have been unable to open or operate viably since March 2020, as the deadline of 30 June 2021 approached. The sector's rent debt is estimated to be more than £2b and a third of premises are unable to reach a solution with their landlords, who have been demanding payment in full from the moment the moratorium ends.
This fear only increased earlier this week when the prime minister delayed the easing of further restrictions until 19 July.
The government undertook a review into discussions between commercial tenants and landlords earlier this year and said it would "not hesitate to intervene further" if there was evidence that productive discussions between landlords and tenants were not taking place and that this represented a substantial and ongoing threat to jobs and livelihoods.
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