Government urged to pursue 'active measures' to address issue of growing rent arrears

By James McAllister

- Last updated on GMT

Government urged to pursue 'active measures' to address issue of growing rent arrears

Related tags Rent arrears Lease Government Coronavirus

A Government report has said more must be done to address the issue of growing commercial rent arrears, warning that business indebtedness remains a major barrier to recovery.

The interim report​ from the Business, Energy and Industrial Strategy (BEIS) Committee, which explores the impact of Coronavirus on business and workers, recommends that Chancellor Rishi Sunak uses his Budget this week to review the support he has offered to business so far and announce more targeted measures aimed at sectors most in need, including hospitality.

With the lease forfeiture moratorium, which prevents landlords from repossessing commercial premises if businesses are unable to pay their rent as a result of the Coronavirus pandemic, currently set to expire at the end of March, the report notes that the Government 'does not appear to be any closer to identifying or facilitating a long-term solution to the difficulties faced by landlords and commercial tenants'.

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

Last month it was reported that ministers are drawing up plans to further extend the moratorium​, but this is yet to be confirmed.

The report argues that Government should be looking at longer-term ‘active measures to address the issue of growing commercial rent arrears’ that must involve businesses, landlords, banks and other stakeholders.

“The report of the BEIS Committee is hugely important and extremely timely," says UKHospitality chief executive Kate Nicholls.

"It is right to highlight that the Budget should focus further support on those sectors that need it most. As businesses begin to look to reopening, they are encumbered with a millstone of debt around their necks, holding back their revival, investment and job creation potential.

“We have worked proactively with Government on finding long-term solutions to the rent debt situation but it is clear that more radical action is needed. This needs all stakeholders to appreciate that they will need to take their share of the pain. Hospitality businesses cannot be expected to pay full rent in a year in which they have been either shut or heavily restricted.

"The first step is an urgent extension of the [lease forfeiture moratorium] to allow time to find solutions."

Last week the #GiveHospitalityABreak campaign was launched​, which is calling on the Government to confirm another extension to the lease forfeiture moratorium and legislate to allow hospitality tenants to defer half of arrears for two years.

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