Property sector calls for £1.75bn ‘bounceback’ grant to stave off closures

In a joint statement, the BRC, British Property Federation, Revo, UKactive and UKHospitality have all called on the government to introduce a “property bounceback grant” to facilitate negotiations between landlords and tenants.

The scheme would see the government offer grants to affected businesses of 50% rent and service charges between March and September, which would be contingent on the occupier reaching an agreement with their landlord on the remaining 50%.

The trade bodies say the scheme should focus on businesses hit hardest by the lockdown and the slow recovery of footfall across the retail, hospitality and leisure sectors. 

The proposal would cost the government £1.75bn to cover half of all unpaid high street rents for six months, though the groups say this investment would save over 350,000 jobs and return £7bn in tax revenue to the Treasury. 

If rent support was extended to cover businesses that had already reached rent payment agreements, the cost would rise to £4.7bn with a total return of more than £11bn to the UK economy, preventing the loss of over 630,000 jobs.

The group said enforced business closures due to the ongoing coronavirus crisis has left many high street occupiers unable to pay rents and, even with holidays and deferrals, mounting debt levels have become “insurmountable” for many businesses. 

The joint statement 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 on 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. The 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, the government should have the confidence to invest in these businesses’ futures and prevent the needless loss of hundreds of thousands of jobs.”