THE extension of the UK governments rent moratorium means that landlords face no income for two years according to experts.
It has been announced that the rent moratorium will be extended until next year, a government aim to protect tenants who have faced financial hardship because of the pandemic.
However, the extension means that landlords could face financial problems as the scheme means they will lose out on rent payments for a further year.
Heather Powell, a partner at tax and advisory firm Blick Rothenberg, said: “No other industry has been asked to trade, or support their customers, in a similar way.
“It is appalling that the Government continues to treat the opportunist businesses who are generating profits to ignore their landlords and refuse to pay the rent due.
“The government’s announcement means that occupiers of commercial premises – offices, factories, restaurants, cafes and leisure venues cannot be evicted for not paying their rent until after 25 March 2022.”
She added: The government is asking tenants to pay rent due as soon as restrictions are removed in their sector, if they are not already paying but this pious hope has no teeth.
“A more nuanced approach, that protects the interests of the landlords and tenants – an approach that genuinely “strikes the right balance” between protecting landlords and supporting businesses most in need is required if all businesses are going to come out of the pandemic ready to meet the challenges of the next ten years.
“Plans for a binding arbitration scheme to resolve disputes from March 2022 gives hope to those landlords have the resources to survive until March 2022 as they may be able to enforce payment of what will be two years overdue rent from tenants who have traded profitably through the pandemic. However, landlords who do not have the cash to do this face fire sales, or worse.”
The scheme, however, has been praised by the hospitality industry, the Guardian reported yesterday that Kate Nicholls, chief executive of UKHospitality said: “These measures are wholly welcome and will banish a grim shadow that has hung menacingly over hospitality since the Covid crisis began 15 months ago.”
Sky News also reported yesterday revealing that Peter Bell, chief executive at The Commercial Tenants Association, said: “Legislation to seek binding arbitration over rent arrears is a watershed moment and will ensure our economy, our jobs and our livelihoods are not massacred by a sudden end to the rent moratoria.
“This announcement is a welcome indication that the government is listening to more than the rhetoric of large influential landlords. In a gesture which shows that it is truly building back better, it has effectively preserved the DNA of our economy: our businesses, large and small.”
The Scottish Government extended its tent moratorium in March this year for a further six months, protecting businesses from eviction during the covid restrictions.