The British Property Federation (BPF) has estimated that commercial property landlords could see rent arrears reach as much as £7 billion, as the moratorium on business property evictions is extended once again.
The moratorium was first introduced in April 2020 to help firms ride out the pandemic, and Shopkeepers, restaurateurs and hospitality businesses will now be afforded protection from eviction until the end of June, which is three months later than planned, City AM reports.
The BPF estimates total rent unpaid for UK commercial property between late March 2020 and the end of June 2021, will be up to £7 billion if the moratorium is extended and the current rate of rent non-payment continues.
That covers all commercial property, including offices and warehouses, but the vast majority of the rent unpaid is from the retail and hospitality sectors.
Some tenants have agreed rent holidays or deferrals with landlords during the pandemic, but a number of tenants have not and have concerns they will not be able to pay the outstanding rent, after suffering months of closures in lockdowns.
However, some landlords have claimed there are some tenants, that are big, profitable companies, are refusing to pay, wrongly taking advantage of the crisis.
Many companies are hoping that Chancellor Rishi Sunak will announce more support for hospitality and retail businesses in the upcoming budget.
A Government spokesman said: “Throughout the pandemic, we have provided an unprecedented £280 billion package of economic support while supporting businesses and high streets, as well as safeguarding millions of jobs.
This includes passing legislation to protect businesses from eviction and insolvency if they are struggling to pay rent due to Covid-19, and publishing a Code of Practice to help negotiations between landlords and tenants.”
The spokesman added that further guidance will be published shortly and that the government will continue to work with commercial landlords and tenants.
If you’re looking for commercial property solicitors in Hull, talk to us today.