Grant estimated to cost £1.75bn, yet it would save 375,000 jobs and generate savings to Government of almost £7bn in the first year alone
The British Property Federation (BPF), British Retail Consortium (BRC), Revo, ukactive and UKHospitality have issued a joint call for the Government to introduce a Property Bounceback Grant to facilitate negotiations between landlords and tenants. This aims to solve the rent crisis looming over the retail, hospitality and leisure sectors and the wider property industry.
The trade bodies, which represent both landlords and tenants between them, have issued the call due to the scale of the rent crisis brought about by Coronavirus. This would see Government investing in the short term to support businesses and landlords whose premises had to close as a result of Coronavirus, for long term economic, employment and social gain.
Analysis commissioned by the five trade bodies found that if Government support covered 50% of unpaid rents across the retail, hospitality and leisure sectors for just six months, it would cost £1.75bn. However, the total return to the Treasury in terms of tax revenue from economic activity would be almost £7bn, and 375,000 jobs would be saved – a return on investment of almost 400%.
If rent support were extended to cover businesses that had already reached rent payment agreements, the cost would rise to £4.7bn, with a total return of over £11bn to the UK economy, preventing the loss of over 630,000 jobs.
Enforced business closures have left many businesses with no revenue and no means of paying rent. For some firms, that debt level is now insurmountable. Without financial support from the Government, both tenants and landlords face the very real risk of business failure, hundreds of thousands of job losses, and long-lasting damage to high streets across the UK.
The trade bodies are proposing the introduction of a Property Bounceback Grant which would have the following features:
- Government grants of up to 50% of rent and service charges between March and September
- Grants would be conditional on agreement by the landlord and tenant to account for the remaining 50% of the rent and service charges through the Government’s Code of Practice.
- Eligibility for businesses in hospitality, leisure and retail – all sectors that have been disproportionately hit by the crisis and have already seen increasing rates of administration and redundancies
- Focused on those businesses that were closed for the longest and unable to generate revenue
In a joint statement the trade bodies said:
“Many retail, leisure and hospitality businesses across the UK have been closed for months. Even where they have reopened, footfall remains down significantly on pre-coronavirus levels. Similarly, landlords have been walking a tightrope to support their customers and protect the pensions and savings of millions of people invested in commercial property across the country.
“Many landlords and tenants are working collaboratively to agree new payment plans, but there remains a significant proportion of rent unpaid. Many businesses will never be able to pay this debt and many landlords cannot afford to sustain losses of this scale. Government must step in and provide rent support, otherwise we will see more businesses closed, more jobs gone and more high streets devastated.
“Without urgent action on rents, many otherwise viable businesses are, through no fault of their own, at imminent risk of failure. Where both landlord and tenant are able to cover at least 50% of the rent owed, and are able to demonstrate they are working together as economic partners, government should have the confidence to invest in these businesses’ futures and prevent the needless loss of hundreds of thousands of jobs.”
