Government urged to intervene over rent disputes to avoid commercial rental market collapse

Without intervention, there will be wide scale job losses and business failures in the coming months, UKHospitality has warned.

The trade body has written to Business Secretary Alok Sharma highlighted that, despite an announced moratorium on enforcement action, hospitality businesses are still being aggressively pursued by a minority of landlords.

In the letter, it calls on the Government to step in to broker a solution at a high-level Ministerial summit based on the assumption that the vast majority of hospitality and leisure businesses will not be able to pay rent for the remainder of the year.

UKHospitality says that there should be a ‘sharing of the pain’ between tenants, landlords, investors and Government and that action must be taken swiftly, with a resolution before the next quarterly rent date at the end of June.

“In June, sector businesses are due to pay nearly £800m in rent, having been forcibly closed and generated no income for over three months,” says UKHospitality chief executive Kate Nicholls.

“We appreciate that landlords have their own financial pressures and the majority of landlords have been happy to work with tenants to find solutions, but a damaging minority continue to put pressure on beleaguered hospitality businesses at the worst time.”

In circumstances where landlords have offered rent deferrals, UKHospitality says this will just lead to an accrual of debt that will be incredibly hard to pay back as hospitality businesses will be trading below normal levels for the foreseeable future.

“Having discussed this issue with a vast number of industry bodies, it’s clear we need a National Time Out on rent as the vast majority of hospitality and leisure businesses will simply not be able to pay for the rest of the year,” says Nicholls.

“The Government must step in quickly to help hospitality businesses, landlords and investors find a mutually beneficial solution. We are ready and eager to sit down with all stakeholders to thrash out an equitable solution, with the Government acting as honest broker.

“If the commercial rental market collapses, it will be to the long-term detriment of the whole economy and lead to millions of hospitality workers losing their jobs and swathes of businesses permanently closing their doors.”

Rent payments remain a major concern for the majority of hospitality businesses, with a recent poll by MCA Insight/HIM​​ showing that 88% of restaurant operators are yet to agree any favourable rental terms with their landlords.