UK Treasury to extend ban on commercial evictions until March 2022

The UK Treasury will on Wednesday extend an existing ban on commercial evictions until March 2022, as the government seeks to protect businesses through the final stages of the Covid-19 pandemic.

British retailers and other commercial tenants have delayed payment of a £6bn rent bill that has built up during the crisis, as the public was ordered to stay at home for three separate lockdowns.

That “debt time-bomb” prompted fears that an early end to the moratorium would lead to the closure of thousands of shops as landlords demand unpaid rents and pursue legal action to claim them.

But Steve Barclay, chief secretary to the Treasury, will announce on Wednesday afternoon that the ban is to be extended for a further nine months, according to Whitehall figures.

Existing debts accumulated during the crisis will initially be “ringfenced” in order to protect struggling tenants. Those arrears will then go through a new arbitration mechanism introduced to help tenants and landlords resolve disputes over those bad debts.

At the same time, Barclay is expected to announce a further extension through the summer of a separate ban on “winding-up petitions”, under which struggling companies are forced to file for insolvency.

Kate Nicholls, chief executive of trade body UKHospitality, said that, if confirmed, the “measures will banish a grim shadow that has hung menacingly over hospitality since the Covid crisis began 15 months ago”. 

The government’s intervention on rents was “wholly merited and justified in these unprecedented times,” she said, adding that it had brought stability back to an uncertain and unsettled property market.

“At last, this existential crisis for hospitality looks like reaching a fair conclusion, easing a path to recovery for a sector that can help the national economy back to prosperity,” said Nicholls.

In April, the government launched a call for evidence on how to resolve the stand-off between tenants and landlords.

Melanie Leech, chief executive of the British Property Federation, which represents landlords, urged ministers to “make it clear that the scandal of well-capitalised businesses exploiting the moratoriums must end, and that those who do not now pay will be penalised for their behaviour”.

The Treasury is separately resisting calls from business groups to tweak other Covid support measures to help companies after Prime Minister Boris Johnson extended the duration of the current, third lockdown.

Companies in sectors, such as nightclubs, theatres and music festivals, have called for further relief given that they will not be able to operate until late July at the earliest — a month later than originally planned.

But the Treasury is still pressing ahead with reductions next month to both the furlough scheme and business rates relief, as well as ending a programme that provided a state guarantee to trade credit insurance.

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