The Government is reportedly rumoured to be preparing to extend the ban on evictions for those in the hospitality and retail sectors until the end of the year, with an official announcement to follow as early as next week.
The current ban or ‘moratorium’ was introduced earlier this year to help those in the hospitality and retail sectors who were forced to close as a result of the pandemic and was due to expire on 30 September 2020. As the Government faces increased pressure to provide further support to struggling businesses, and as the September quarter day draws ever closer, an extension until the end of the year seems likely.
However, this news has been met with mixed views.
The trade association UKHospitality estimates that hospitality companies owe £760 million of unpaid rent, and its head Kate Nicholls believes that this extension will provide vital support: “It is very welcome news that the continuation of vital support measures is being actively considered and we urge the Treasury to confirm this as soon as possible to protect the greatest number of jobs.”
But some Landlords are reportedly unhappy about the extension with many claiming that tenants have been refusing to pay rents even when they have available funds to do so, and that big profitable companies had been taking advantage of the pandemic. This view is echoed by Melaine Leach, chief executive of the British Property Federation who has reportedly said: “The moratorium, however, must come to an end as well-financed businesses have been exploiting the government intervention to avoid paying rent, when they are indeed able to pay, and this puts at risk our sector’s ability to support vulnerable tenants. For many, extending the moratorium will simply mean growing the volume of rent arrears, and this debt is already at unsustainable levels.”
The Government has a balancing act to perform in order to protect the needs of both commercial tenants and commercial landlords alike. The UK economy is in a fragile state and the extension will be seen by many as a means to provide further support to allow the economy to strengthen and grow. However further extensions to the moratorium only seek to contribute to unpaid rents and ultimately increasing debts. Allowing extensions for an indefinite amount of time will only mask the problem and could cause longer term harm to the economy.
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