The UK government ordered the hospitality sector to close due to the Covid-19 pandemic on the evening of 20 March.
Rishi Sunak then introduced a three-month rent forfeiture moratorium in March, which prevented landlords from repossessing commercial properties where tenants were unable to pay their rent. In the short term this was a great incentive and helped many businesses survive. The problem was this was short term and as the SME club has been campaigning for Government intervention with our #saveourshops campaign as so shops, pubs, restaurants and bars now find themselves with rent arrears and no way to pay them as they haven't been able to trade for 4 months.
Milk & Honey owner Jonathan Downey has launched a campaign to introduce a nine-month National Time Out on rent payments and warned that without one, pubs and bars will simply not survive the pandemic as landlords continue pursuing rent payments across the UK.
However, the owner of Milk and Honey in Soho Downey said feedback so far from the industry, and his own experience, suggests the majority of landlords are still expecting the next rent instalment to be paid.
Milk & Honey has won multiple awards over the years for its acclaimed cocktails and service
Landlords refuse to budge on payments
Downey has run Milk & Honey from its Soho venue for 18 years and has paid almost £4 million in rent over that period. The annual rent payment is now £210,000
But although Downey has been unable to operate his bar since mid-March due to the Covid-19 lockdown, his landlord expected the next three months of rent to be paid in full in June.
“We wrote to our landlord saying we’ll probably be closed for six months, what can you do to help? And they’ve come back saying they still expect basic rent and insurance to be paid,” Downey said. “We can’t pay rent on a site we can’t operate from. Plus the landlord owns the building outright, yet they still expect full payment.
“The government has helped with the job retention scheme and the business rates break, but none of that is enough to enable most businesses paying significant rent to open and pay their arrears.
You can’t take six months of work out of the year and still expect us to pay rent.”
Downey has campaigned to introduce a #NationalTimeOut for help hospitality venues and landlords. The initiative would see bars and other on-trade establishments granted a non-government-funded nine-month rent holiday that could save more than two million jobs.
It would also enable landlords to push their loan repayments back for nine months, and extend each corresponding lease by nine months so that payments aren’t lost, just postponed.