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Coronavirus: UK hospitality sector calls for government help with rents

Coffee shops face going out of business in the UK. Photo: Getty
Coffee shops face going out of business in the UK. Photo: Getty

The hospitality sector has urgently called on the government to step in and broker peace between businesses and landlords.

In a letter to business secretary Alok Sharma, trade association UKHospitality - which counts FTSE 100 (^FTSE) companies among its members - has said that hundreds of shops, bars, restaurants and hotels cannot afford to pay rent, adding that they are still being pursued by over-zealous landlords who are taking their deposits and legal action against them.

The warning comes despite the government putting in place measures to prevent aggressive rent collection in the wider commercial sector.

The measures are designed to ban the use of statutory demands and winding up orders where the non-payment is due to COVID-19.

READ MORE: UK economy to recover slowly from pandemic hit

The body wants to see a nine-month rent-free period, adding that where landlords have offered rent deferrals debt will build up that cannot be paid back.

UKHospitality goes on to say that the commercial property market is broken and has called on the government to solve the stalemate or face wide-scale job losses and business failures in the coming months.

UKHospitality chief executive Kate Nicholls said: “In June, sector businesses are due to pay nearly £800m ($968.30m) in rent, having been forcibly closed and generated no income for over three months. We appreciate that landlords have their own financial pressures and the majority of landlords have been happy to work with tenants to find solutions, but a damaging minority continue to put pressure on beleaguered hospitality businesses at the worst time.”

Nicholls called for a national time out on rent, saying that the vast majority of hospitality and leisure businesses simply won’t be able to pay for the rest of the year.

“We are ready and eager to sit down with all stakeholders to thrash out an equitable solution, with the government acting as honest broker,” she said.

“If the commercial rental market collapses, it will be to the long-term detriment of the whole economy and lead to millions of hospitality workers losing their jobs and swathes of businesses permanently closing their doors.”