The UK government has made the decision to extend the ban on landlords evicting commercial tenants or recovering rent debts for an additional three months. Originally scheduled to end on 31 March, the ban will now remain in place until 30 June. This move is expected to bring relief to struggling retailers who have been heavily impacted by the pandemic.
The extension of the ban is primarily due to the significant amount of commercial rent debts that have accumulated over the course of the pandemic. It is estimated that around £4.5 billion of rent debts have built up since the ban was first introduced. Many high street retailers have taken advantage of this policy by withholding rent, as they have faced substantial losses during the three lockdowns. Helen Dickinson, chief executive of the British Retail Consortium, has emphasized the importance of the ban in protecting retailers from being forced into administration by landlords.
Despite the positive impact it has on struggling retailers, the extension of the ban has not been welcomed by property owners across the country. The British Property Federation, representing major property owners such as Hammerson and British Land, has expressed dissatisfaction with the situation. They argue that there are well-capitalized businesses that have chosen not to pay rent despite having the ability to do so. This behavior has negatively affected pensions, savings invested in commercial properties, and public finances. Additionally, Mark Allan, chief executive of Land Securities, has highlighted that the ban has created a divide between landlords and tenants at a time when collaboration is crucial.
In response to the differing opinions, the government has reaffirmed its commitment to supporting both landlords and tenants in reaching their own agreements regarding rent debts by 30 June. To facilitate this, a call for evidence on commercial rents has been launched to monitor negotiations between both parties. The government is considering a phased withdrawal of current protections and exploring legislative options to assist businesses that have been severely impacted by the pandemic.
Overall, while the extension of the eviction ban provides some relief for struggling retailers, it has also sparked discontent among property owners. The government is striving to find a balanced solution that supports both landlords and tenants in navigating the challenges brought on by the ongoing pandemic. The call for evidence on commercial rents will inform the government’s decision-making process, and additional measures may be implemented to aid businesses after 30 June.
Useful links:
1. UK government collection on commercial rents and COVID-19
2. British Retail Consortium website
