The government announced on March 11th that its ban on evictions by landlords and the recovery of rent arrears has been extended again. Only last month we notified clients that the measures would be in place up to the end of March. Now a further 3 month grace period lasting until the end of June has outraged landlords across the UK.
The extension was greeted with relief by firms in the retail and hospitality sectors. These temporary protections that were introduced to safeguard businesses and domestic tenants will have been in place for well over a year by the time this extension ends. Though proposals have been made for a gradual withdrawal of the protections.
Chief executive of the British Retail Consortium, Helen Dickinson, said: “Retailers have lost over £22 billion of sales during the three lockdowns, and the ban on aggressive rent enforcement is a vital protection against being pushed into administration by landlords.”
However it’s estimated that £4.5 billion of commercial rent debts have built up during the pandemic. Household names such as H & M and Boots have made use of the ruling by withholding rent. Owners of a number of the country’s largest property portfolios have claimed well-capitalised businesses are being allowed to “raid the nation’s pensions.” Ministers have subsequently urged companies that can pay rent to do so.
What was a significant and shrewd temporary policy is at risk of causing serious damage to the economy. Hopefully we do not see large numbers of businesses that are unable to service their debts post pandemic becoming insolvent as soon as the eviction ban ends . If so, its regrettable that they will have been preventing landlords from finding new tenants and recouping some of their own losses during this turbulent and deeply sad period for many British businesses.