Business & landlords call for introduction of Property Bounceback Grant11 August 2020
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.
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.”
Read coverage of the Property Bounceback Grant:
Landlords tell ministers: let’s go halves on rent bills - The Telegraph, 10th August 2020
Property sector calls for £1.75bn ‘bounceback’ grant to stave off closures - Retail Week, 10th August 2020
Property calls for £1.75bn government cash for ‘rent crisis’ - EG, 10th August 2020