UKH calls for affirmative action on rent debt

By Michelle Perrett

Published: 04 May, 2021

UK Hospitality (UKH) has called on the government to take “decisive” action on rent debt to help safeguard sector recovery and protect up to a million hospitality jobs.

The trade body has written to the communities and local government secretary of state Robert Jenrick MP, warning that while some landlords have adopted a collaborative and supportive stance to tenants, there is also a “significant swathe” of commercial landlords that have rejected this approach and are being “heavy handed and aggressive”.

The UK government extended the rent moratorium in March meaning that hospitality businesses were protected from landlord eviction actions until the end of June. It also launched a call for evidence on commercial rents to help monitor the overall progress of negotiations between tenants and landlords

UKH has written the letter ahead of submitting its formal evidence. It said the government’s strategy to date – introducing and repeatedly extending a ban on enforcement action – has provided sector businesses with welcome breathing space and protected jobs in the midst of the pandemic.

However, it has not dealt with the huge amount of commercial rent that is still technically owed and which will be demanded by landlords once that ban expires.

UKH is urging the government to help tackle the £2.5bn rent debt crisis. It has called for an extension of protections for six months after Covid-19 restrictions are removed, including all enforcement activity, and particularly County Court Judgments (CCJs).

UKH has also proposed the development of a national-level adjudication process on ‘legacy rent debt’ that would see at least 50% of rent debt written off for this period, and at least 25% written off when the sector operated under restrictions.

It also asks that landlords and tenants come to reasonable repayment terms, led by guidance and further protections if necessary. Although deals already agreed between parties would not be affected by any adjudication.

“The time has come to get this issue sorted,” said CEO Kate Nicholls.

“As a starting point, our overriding principle is that businesses and landlords have to share the pain caused by enforced closures and restrictions. With the right outcomes, we can help to protect the hospitality sector in the short-term and accelerate its recovery – contributing to more jobs and reviving high streets and communities.”

She added that with the current restrictions hospitality businesses are not profitable and called for breathing space after 21 June, when the country is expected to fully reopen, to gauge customer demand.

“We are concerned that the removal of protections would be disastrous and result in a huge increase in enforcement activity – meaning business failures and jobs lost,” she said.

“With affirmative action from government, hospitality can begin to rebuild and be the foundation of a truly national recovery. We will recreate jobs, training opportunities and repair our beleaguered town and city centres in every part of the county. The alternative, to remove protections, is too catastrophic an option to entertain.”

This weekend, it was revealed that a staggering £80.8bn of hospitality sales have been lost in the past 12 months, according to the latest edition of the UKH Quarterly Tracker compiled with CGA.