Landlords in talks to have taxpayers subsidise unpaid retail rent

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// Landlords in talks to “furlough” shops as rents go unpaid
// The scheme is based on a similar plan introduced successfully in Denmark
// UK Government invited industry leaders last week to help prepare a “furloughed space grant scheme” proposal

Landlords are reportedly in talks with the government to see if unpaid retail rent bills due to the coronavirus pandemic could be placed on a furlough scheme of sorts.

According to The Telegraph, the UK Government is considering a “furloughed space grant scheme” proposal, with ­officials inviting industry leaders last week to help prepare a rescue plan.

The scheme could see taxpayers subsidise the rent bills for “furloughed” shops and restaurants in the pandemic recession as tensions grow between landlords and troubled retailers.


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Swathes of retailers have been unable, or refused, to pay their rent due at the end of the first quarter as a result of the lockdown and plunging revenue, which in turn places landlords at risk losing billions at the next key payment date in June.

Landlords have also yet to receive any specific support from the government, especially since it placed a ban on landlords issuing statutory demands to force retail tenants to cough up the rent owed.

The proposed space furlough scheme reportedly under discussion is modelled on a similar plan introduced successfully in Denmark.

It would see tenants contribute some rent and landlords agree to a reduction in payments, while the Treasury uses taxpayer funds to plug the gap.

Sources speaking to The Telegraph said the proposal could focus on the hardest hit sectors, such as retail and leisure, and be a “sliding scale” of support.

“The government is considering it ­seriously,” British Property Federation chief executive Melanie Leech told The Telegraph.

“The conversation is about how you best fill that gap rather than not recognising that there is a gap.”

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3 COMMENTS

  1. Government shouldn’t be paying rents for stores or shops.
    People need money not shopping centres. May shopping centres shouldn’t be changing rents
    Allow all shopping centres to be government run. :-).
    Landlords can’t collect rents simple as that.

  2. It is frustrating to see landlords seem oblivious to the change in ability to pay commercial rent. They do have the law in there favour. This should be addressed. The covid crisis was neither sides creation but to be demanding rent regardless of the effects of closure is unacceptable. The anxiety is huge and the opportunity for the landlord to take back a property that has been fitted out at huge cost certainly a opportunity for the landlord. The landlord should feel the pain just like the tenant. It’s only fair. It may result in the frustration of lease comes into law as tenants can no longer run the property as. Commercial venture and walks away. It may also be challenged that the compulsory closure period is frustration of lease and rent is not due. Either way landlords should be writing off rent due or risk never getting the building occupied again for a long time

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