British Property Federation: moratoriums on commercial property owner rights are undermining UK recovery
With the out-of-lockdown roadmap and vaccination programme on track, and high streets predicting a strong economic bounce-back, the British Property Federation (BPF) urges the Government to end the moratoriums on evictions and other enforcement action in June 2021.
The vast majority of commercial property owners and tenants have already reached agreement on rent payments – with tenants in distress as a result of Covid-19 being supported through new payment plans, waivers, and rent holidays and deferrals. Meanwhile, well-capitalised businesses who have traded throughout the pandemic continue to withhold much-needed rental income from the millions of pensioners and savers who invest in commercial property and own our high streets. This abuse must end now.
Property owners’ support for the hardest hit tenants in the retail, hospitality and leisure sectors will continue until they are back on their feet – empty premises are a blight on our town centres and shopping centres, and are as damaging to property owners as they are to other businesses and local people.
Where tenants and property owners are engaging, it is clear that the retail market is re-setting fast. Rents are coming down and more creative partnerships that work for both parties are being agreed. This is not only in the interests of existing businesses building a bright post-Covid future but also creates the conditions for new entrepreneurial players to enter the market and fuel economic recovery.
It also means that a tenant who has not yet reached agreement with their property owner, but is genuinely in distress, should have nothing to fear.
However, further reassurance should be given to businesses through an enhanced Code of Practice backed by the Government, with a clear framework that can be applied consistently to each unique lease negotiation on a case-by-case basis. This would be particularly helpful where there is an imbalance of negotiating power, to protect small and independent businesses.
The BPF is willing to support a targeted, time-limited extension of the moratoriums for retail, hospitality and leisure businesses to reach agreement on their rent arrears accrued to June 2021, with the assistance of an enhanced Code of Practice.
This extension of protections for rent arrears owed by these particular sectors should be for no more than six months, with binding arbitration as a backstop. The Courts are best placed to carry this out, which is consistent with their existing role in relation to contract disputes.
Melanie Leech, Chief Executive, British Property Federation comments:
“Nowhere else in the world has the property industry been subject to such punitive measures by a government. The billions of pounds looking to invest in UK real estate will be watching our Government’s actions closely as the moratoriums draw to an end at the end of June.
“The moratoriums must end and normal market conditions must return. The future of our town centres depends on this – the commercial property sector requires certainty of income to create the modern, fit-for-purpose town centres that will play a major role in economic, social and environmental recovery.
“Property owners want to continue to support those tenants in genuine distress, and we will work with the Government if necessary to provide additional reassurances to the minority of tenants who have not already reached agreement with their property owner about how their debts will be dealt with.”