Hospitality and retail businesses face a ‘bloodbath’ of failure and closure as landlords prepare to enforce rent collections as the government mortarium to prevent struggling companies from eviction over the summer ends at the end of the month.
The Government’s ban on evictions ends on October 1, meaning legal action can then be taken to evict tenants including pubs, bars and restaurants, struggling in the wake of Covid, after summer of lockdown, and the possibility of a second lockdown.
The government has been warned that this would lead to a “bloodbath” of hospitality business failures and job losses .
UKHospitality has written chancellor Rishi Sunak and the secretary of state for housing, communities and local government Robert Jenrick warning that a failure to act could see thousands more jobs lost, and predicts that by the time the moratorium is lifted on 1 October, the hospitality sector’s outstanding rent bill will collect the 3 amount to more than £1b.
UKHospitality chief executive Kate Nicholls said: “A huge economic shadow hangs over the sector; as things stand, later this month, many businesses will not be able to pay rent that is due. Landlords will be able to take back the keys and thousands of sites and the jobs they support will be lost.
“More time is needed to come to agreements. A moratorium that goes on until the end of March 2021 will allow businesses to trade through Christmas and New Year. With the ‘rule of six’ in place, that period is undoubtedly going to be tough but at least should generate more cash than had been possible in the closure period, putting tenants into a stronger position to repay debt accrued.
“While the hospitality sector has suffered through this crisis, we appreciate the landlord community has too. We would be keen to work with government to build on our constructive partnership to ensure any future moratorium is targeted at those most in need and, potentially, conditional so that it brings parties together.”