Hospitality industry asks government for financial support to overcome rent deadlock
The hospitality industry has warned there will be significant job losses and business failures unless the government provides financial support to overcome the rent stand-off between landlords and tenants.
Trade body UK Hospitality has said that a continued “stalemate” between landlords and tenants on the matter of unpaid rent needs to be resolved or reopening will be at risk.
In a letter to the Chancellor and Secretaries of State at BEIS, DCMS and HCLG, chief executive Kate Nicholls said the deadlock is “the biggest threat to the recovery and future of hospitality.”
The letter sets out some measures to resolve the rent stalemate which include the possible introduction of tax credits to incentivise rent waivers. UK Hospitality has also suggested property bounce back bonds to cover lost revenue form the closure period and the introduction of a furloughed space grant scheme.
The situation has remained unchanged for months, as the hospitality industry is unable to pay rent due because they have been closed or trading at reduced capacity. Landlords are also reluctant to sanction rent holidays without assurances from banks or protection from the government.
Following news yesterday that the government is planning to bring forward the date of reopening of some restaurants and pubs to 22 June, Nicholls said the stand-off could risk reopening.
“We are moving towards the reopening of the sector and many people, both in and out of hospitality, are keen to see businesses open again. Unfortunately, all the good work in keeping businesses afloat during lockdown and the best-laid plans for restarting, could be completely undone by the impasse on rents.”
The trade body is asking for an extension of the current forfeiture moratorium, which prevents landlords evicting tenants affected by the pandemic from the end of June until the end of the year.
“The reality is, though, we are at a point where the Government has to step in and act decisively, otherwise businesses will go under, jobs will be lost, and rent will never get paid,” Nicholls said.