Landlords go to war over £1.6bn in unpaid rents 16 months after the start of the pandemic
Shops, restaurants and offices are battling landlords over £1.6billion of unpaid rent 16 months after the start of the pandemic, industry bosses revealed.
The coronavirus crisis has ripped through the High Street forcing businesses to chalk up around £7billion of rent debt owed to landlords.
The British Property Federation (BPF) has told MPs that its members are battling with tenants over 23 per cent of this sum – or £1.6billion.
The coronavirus crisis has ripped through the High Street forcing businesses to chalk up around £7bn of rent debt owed to landlords
Another £3.5billion or so has been paid back and £1.5billion is subject to agreements to reduce the debt, repay over a longer period or write it off completely.
Just a tenth of hospitality businesses have been able to pay their rent in full during the pandemic, while a quarter have paid part of their rent, often by taking on huge amounts of debt, UK Hospitality (UKH) said.
In retail, despite strong trading since shops reopened on April 12, between a tenth and 30 per cent of rent is still in dispute, says the British Retail Consortium. The enormous sums involved have sparked a fresh war of words.
Ghislaine Halpenny, director of strategy and external affairs at the BPF, told MPs on the Business Committee: ‘There have been a number of well capitalised businesses who have not paid.
‘We know that has a severe impact as large companies are using their market power to abuse small landlords.’
The group claims that one in seven commercial tenants have ignored approaches by their landlord to avoid entering talks to agree repayment plans, and believes the rent moratorium must be ended.
UKH has argued that negotiations have hit a stalemate because of landlords demanding unreasonable rent for periods when businesses were closed or trading was restricted.
Its chief executive Kate Nicholls said: ‘The situation is improving, but there are still one in five, where there is a stalemate in negotiations.’