Property industry trade bodies have slammed the government’s decision to extend the ban on evicting commercial tenants until the end of the year.
The moratorium was introduced in April to protect retail and hospitality businesses that could not trade during lockdown and was later extended to 30 September.
Industry leaders pointed to the ban’s damaging impact on property owners and said they had been left to fend for themselves while well-capitalised retailers withheld rent they could afford to pay.
“These unintended consequences of the moratorium will simply continue now it has been extended,” Revo chief executive Vivienne King told Property Week.
“The situation has been exploited by big sophisticated businesses that are improving their own liquidity at the cost of owners and investors who are having to cover the gap.”
The British Property Federation also lambasted the extension, saying every party “must play their part”.
Adam Coffer, chair of Property Owners Forum which represents over 100 independent property owners and has been contributing to government on the matter, said: ”We have found the vast majority of our members and their tenants have reached concessions, waivers, payment plans according to affordability, through open dialogue and collaboration.
”In contrast, the moratorium has consistently been abused by large, multiple site tenants- typically backed by avaricious, well-capitalised institutions (hedge funds, private equity etc..)- who merely ignore rent in the knowledge that no property owner can challenge them. Many have traded very profitably throughout the pandemic and are treating property as a credit card for their benefit.This totally undermines the market and the ability to help those tenants who most need it.
”Only the more unscrupulous tenants are refusing to collaborate and only the more unscrupulous landlords need to be protected against.”
One retail landlord said the decision to extend the ban was “disgusting”.
He told Property Week: “They are kicking the can further down the road and allowing our debt to get bigger.
“I think there’s going to be uproar if they extend it without offering some help to landlords.”
BPF chief executive Melanie Leech said it was “imperative” that government confirmed this would be the final extension to the measure. She added that it must lay out a plan to help landlords and tenants transition back to normal market conditions after the moratorium has ended.
The news comes days after creditors gave the nod to New Look’s controversial CVA plan, which includes landlords accepting no rent on 68 shops and as little as 2% of turnover on 402 stores.
King said the use of CVAs had changed from genuine rescue plans to renegotiating contractual agreements for the long term.
She added: “A lot of the CVAs have been getting increasingly audacious. New Look have taken it that much further – they’ve taken it too far.”
Leech said: “We are increasingly seeing CVAs brought forward where the focus is wholly on rewriting property leases