Trade associations have been in talks with ministers for a property bounceback grant for sectors which have been hardest hit by the Covid pandemic
Proplend chief Brian Bartaby has welcomed a proposal for a scheme where the government pays half of the rent for commercial businesses worst affected by the Covid-19 pandemic.
Trade associations including the British Property Federation, British Retail Consortium, UK Hospitality, Ukactive and Revo, have been in talks with ministers for a property bounceback grant for the retail, hospitality and leisure sectors, which have been hardest hit by the crisis.
This would involve government grants paying up to 50 per cent of rent and service charges owed by businesses in these sectors for the six months between March and September.
The grants would be conditional on agreement by the landlord and tenant to account for the remaining half of the rent and service charges and focused on the firms that were closed for the longest and unable to generate revenue.
Analysis commissioned by the five trade bodies found that the cost of government support would be countered by the return made to the Treasury.
The scheme would set the government back by £1.75bn, however, the total return to the Treasury from tax revenue from economic activity would be almost £7bn and 375,000 jobs would be saved. This makes a return on investment of almost 400 per cent.
Brian Bartaby, founder and chief executive of commercial property peer-to-peer lending platform Proplend, was pleased with the proposal for the scheme and hopes it comes to fruition.
The introduction of a property bounceback grant would be a very welcome lifeline to both tenants and landlords given the devastation in the commercial industry over the past two quarters and the rapidly approaching September quarter date, he said.
Bartaby said, the fact that tax revenues to Treasury from the follow on trickle-down economic activity would exceed its cost, seem to make it a no brainer.
It’s fantastic that these trade associations have come together to devise and present a workable solution, hopefully government will listen, he said.
The trade bodies which created the proposal, said that enforced business closures left many firms with no revenue and no means of paying rent and without government support, both tenants and landlords face the risk of company collapses, hundreds of thousands of job losses and lasting damage to high streets.
Without urgent action on rents, many otherwise viable businesses are, through no fault of their own, at imminent risk of failure, a joint statement from the trade bodies said.
Where both landlord and tenant are able to cover at least 50 per cent 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, it said.
Last month Bartaby called for the government to scrap its “unfair” moratorium of commercial property rents, saying it prevented them from evicting clients for not paying their rent for 90 days.