It’s time to let the market sort itself out

EDITOR’S COMMENT: It seems that our friends at the Ministry for Housing, Communities and Local Government have finally realised that when the shambles that is the moratorium on rents comes to an end on 30 June (if it comes to an end then), there is going to be billions of pounds of unpaid rent that landlords, rightfully, will want to collect. According to Remit Consulting, that rental arrears figure is now standing at more than £5.3bn, with almost £3bn of that coming from the retail sector and £1.1bn from the office sector. Come 30 June, landlords to the numerous tenants that have opted not to pay just because they could, rather than they couldn’t afford to, should be well within their rights to launch a barrage of winding-up orders, statutory demands and eviction notices. My guess is there are probably piles of these ready to go on lawyers’ (home) desks already. But government, of course, doesn’t want that and the inevitable carnage it would cause so has launched a call for evidence to find how landlords and tenants are responding to the build-up of rent arrears. Evidence that it says will “support the government’s decision-making on the best way to withdraw or replace these measures while preserving tenant businesses and the millions of jobs that they support”. Evidence that it has only just started to collect and will only gather until 4 May. Now, this may well be the cynic in me, but does anyone else get the feeling that this might be yet another way for government to place the burden of economic recovery on property owners? No one denies that the retail and leisure sector employs a lot of people. We’ve heard that message loud and clear, and repeatedly. And yes, when we all get released there is no doubt that we will flock back to the shops, to restaurants, to experiential leisure. That may well lead to more jobs created (or more likely lost jobs recreated, but what’s a little semantics in the war between good and evil?). But what about those businesses that enable those places for us to shop, eat and play together? Don’t they deserve to be protected too? Those businesses have lost £5.3bn of rent over the past 12 months and haven’t been able to do a thing about it. Government needs to shoulder some of the responsibility for that. And what is going to come next. Let the market sort itself out. Most landlords have and will find mutually agreeable solutions with tenants that have been left crippled by Covid. My guess is that will continue for as long as it needs to. But level the playing field. No landlord wants an empty building, after all. Let property owners fight if there is a battle to be waged. If they have a zombie tenant who won’t pay, and a potential new occupier who can and might even pay more, let them put their space to use. It is only fair. And it is that which will bring our high streets back to life. Not a constant kicking of the can down the street. This is not a battle of good versus bad, of the job providers versus the rent collectors, this is the circle of life and the nature of business. Let the moratorium end. Keep an eye on the use of CVAs and let a little bit of litigation hit the headlines. The market will right itself.   To send feedback, e-mail samantha.mcclary@egi.co.uk or tweet @samanthamcclary or @estatesgazette