Retail, hospitality and leisure firms have urged the government to pay up to £5bn to cover a proportion of rents for struggling businesses to avoid further high street job losses.
Trade bodies, including the British Property Federation (BPF), British Retail Consortium (BRC) and UK Hospitality, have called on the government to launch a Property Bounceback Grant.
The groups, which represent both tenants and landlords, said a £1.75bn grant for businesses that have been unable to reach an agreement would save 375,000 jobs and provide a £7bn total return to the Treasury through tax revenue.
If the grant is extended to those firms that have already settled their rent bills, but may struggle to survive going forward, it would cost the government £4.7bn and save 636,000 jobs.
“Without urgent action on rents, many otherwise viable businesses are, through no fault of their own, at imminent risk of failure,” the trade bodies said in a joint statement.
The grant would see the government cover 50 per cent of rent and service charges between March and September, and would be conditional on the landlord and tenant to account for the remaining rent.
Businesses in the hospitality, leisure and retail sectors, which were forced to close for months during the UK coronavirus lockdown, would be eligible for the rent payouts.
Research by Remit Consulting showed that commercial landlords were owed £1.5bn of unpaid rent in the three months following the March quarter pay date.
“Many retail, leisure and hospitality businesses across the UK have been closed for months,” the trade bodies said.
“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 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. Government must step in and provide rent support, otherwise we will see more businesses closed, more jobs gone and more high streets devastated.”
A spokesperson for the government said it recognised the “huge challenges” being faced by tenants and landlords”.
“Which is why we’re working closely with them to ensure they are supported and would urge both landlords and tenants to follow the example of others and find solutions that work for both parties,” the spokesperson said.
“The government has taken unprecedented action to protect jobs and livelihoods, with a package of around £16bn of support, including loans, rates relief and grants for businesses to support them through the pandemic.”