Up to 75% of night-time venues are facing bankruptcy without a solution to the £2.5bn rent crisis, the Night Time Industries Association (NTIA) has warned the government
The trade body has written to Downing Street to demand ministers step in immediately to help alleviate the issue. The letter also includes results from a survey that showed the precarious situation for the night-time industry.
Last week, 360 corporate and SME businesses were surveyed across the UK, revealing the scale of this crisis. The survey found:
- 75% of commercial tenants will be forced to look at insolvency or restructuring if further support is not provided post the rent moratorium.
- 80% of commercial tenants are still facing unproductive discussions with their landlords.
- 93% of commercial tenants have encountered substantial job losses and 70% believe there will be further redundancies post-moratorium.
- 92% of commercial tenants are in favour of an Australian Rent Model, featuring a shared burden between tenants and landlords.
The letter, in which the NTIA expressed frustration over “the short-term reprieve” from evictions that is set to expire next month, stated: “Large swathes of the nightlife sector have been closed since March 2020 with no meaningful opportunity to open and trade. As a result, businesses have been unable to pay rental arrears, through no fault of their own, and have accrued considerable debts. While the government put in place a moratorium on evictions in March 2020, this is due to expire on 30 June, and the prospect of repaying these debts, for most in the sector, is largely unattainable.
NTIA is now urging the Government to consider a ‘shared burden’ solution which would see tenants, landlords and Government contribute to rental arrears to avoid mass evictions and a race-to-the-bottom amongst prospective landlords for the leasing of premises.
“Consideration must be given to a more robust code of conduct or adjudication process, which will require mandatory or legislative elements within it, to ensure that everyone comes to the table to resolve this appalling situation we find ourselves in.” they say.
Rekom UK chief executive Peter Marks said: “We have always recognised landlords are victims alongside us operators in the covid world, but to have full reparations even over time would shift all the cost on to beleaguered operators, many of whom would simply not survive, rendering any public money spent on support wasted.” Tokyo Industries chief executive Aaron Mellor added: “While, of course, we understand the public health reasons why, we cannot be expected to take the full rent burden alone while receiving no income. Mandatory 50% rent waivers for the affected period are needed. Codes of conduct do not work with institutional landlords.”
Jeff Smith, Labour MP for Manchester Withington and co-chair of the All-Party Parliamentary Group for the Night Time Economy, said: “The government needs to urgently consider potential solutions, such as a shared burden model and loans to enable longer-term debt restructuring. I would welcome the opportunity to work with the government towards a solution that helps steer these businesses out of the precarious position they find themselves in.”