Government looks to assess progress of commercial rent negotiations as moratorium extended

By James McAllister

- Last updated on GMT

Government calls for evidence to monitor progress of commercial rent negotiations as lease forfeiture moratorium extended

Related tags: Rent arrears, Coronavirus, Restaurant, Rent

The Government has confirmed another extension of the lease forfeiture moratorium and is to launch a call for evidence to help it monitor the overall progress of commercial rent negotiations.

Housing Secretary Robert Jenrick confirmed that the protections, which prevents landlords from repossessing commercial premises if businesses are unable to pay their rent as a result of the Coronavirus pandemic, will now expire at the end of June.

The moratorium had been scheduled to end on 31 March.

In a statement, Jenrick said: "It is right that as we move through the roadmap, we ensure that businesses and renters continue to be supported.

"We have taken unprecedented action to support both commercial and residential tenants throughout the pandemic – with a £280bn economic package to keep businesses running and people in jobs and able to meet their outgoings, such as rent."

Pressure has been growing on the Government not only to extend the moratorium, but also to try and find a permanent solution to the sector's growing rent debt. 

It is understood that close to £3bn in unsettled rent will have accumulated within hospitality by the end of March.

Following Chancellor Rishi Sunak's Budget last week, UKHospitality chief executive Kate Nicholls said 'the biggest gap' in Government support remains the outstanding sector rent debt.

"We need the Government to work with industry to establish a landing zone to resolve this millstone around our recovery," she said. 

The Government states that its current position is to support commercial landlords and tenants to agree their own arrangements for paying or writing off rent debts by the time the moratorium is now due to expire on 30 June.

However, it adds that if these discussions do not happen and there remains 'a significant risk to jobs', the Government is prepared to take 'further steps'.

As such, it plans to launch a call for evidence on commercial rents to help monitor the overall progress of negotiations between tenants and landlords.

The call for evidence will set out potential steps the Government could take after 30 June, ranging from a phased withdrawal of current protections to legislative options targeted at those businesses most impacted by Covid-19. 

Michael Kill, CEO of the Night Time Industries Association, welcomes the extension of the moratorium, but adds that the Government must now work to find a longer-term solution to the ever-growing debt.

"Business owners will continue to take on further rent debt through this period, which will inevitably compromise their future," he says.

"This needs Government intervention and will require lead departments to use this period to address these issues and look at potential solutions where the stakeholders share the burden of debt from rent arrears."

Related topics: Business & Legislation

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