Five U.K. trade bodies have issued a joint call for to the government to help solve the rent crisis, which threatens to ruin the restaurant industry.
Together with UK Hospitality, The British Property Federation (BPF), British Retail Consortium (BRC), Revo, and ukactive have offered the “Property Bounceback Grant” where the government pays half of the owed rent for a six month period in order to facilitate negotiations, and break the current impasse, between landlords and tenants across the hospitality, retail, and leisure sectors. “Many landlords and tenants are working collaboratively to agree new payment plans, but there remains a significant proportion of rent unpaid,” the trade bodies said. “Many businesses will never be able to pay this debt and many landlords cannot afford to sustain losses of this scale.”
The collective has done its maths homework and says that short-term government investment will lead to long-term economic, employment, and social gain: Analysis commissioned by the five trade bodies found that if government support covered 50 percent of unpaid rents across the retail, hospitality, and leisure sectors for six months, it would cost (the taxpayer) £1.75 billion, The Eater reported. However, it says, the total return in tax revenue from economic activity would be almost £7 billion, and 375,000 jobs would be saved — a return on investment, it claims amounts to almost 400 per cent.
It also says that the more the government outlays, the more it will receive later down this line, claiming that if rent support were “extended to cover businesses that had already reached rent payment agreements, the cost would rise to £4.7 billion, with a total return of over £11 billion to the U.K. economy, preventing the loss of over 630,000 jobs.”
The group is proposing the introduction of a “Property Bounceback Grant,” first floated in a proposal by UK Hospitality in June. It says now that it is focused on those businesses that were closed for the longest and unable to generate revenue.
-Government grants of up to 50 per cent of rent and property service charges between March and September (from the beginning of lockdown until when the period in which landlords are legally prevented from evicting tenants expires.)
-Grants would be conditional on agreement by the landlord and tenant to find (or agree on) the remaining 50 per cent of the rent and service charges through the government’s code of practice.