This follows the successful implementation of a similar scheme in Denmark.
The Government has acted swiftly to protect the interests of tenants whilst landlords have been left wondering when they can expect payment. Many rent payments have not been made and landlords are reluctantly having to agree rent free periods or other concessions in order to assist tenants who have been forced to close their business and cease trading due to the lockdown measures imposed by the Government. As a result, many landlords are facing dramatically reduced revenue due to the effects of COVID-19. The rent recovery routes have also been put on hold and therefore landlords are left without their regular income or enforcement options.
This proposed scheme looks to plug that gap with a view to the Government subsidising lost rental income in the restaurant and shop retail sector. With the next quarter date just around the corner, the Government is keen to put something in place to ensure that landlords are not further affected by the economic slow down and the holding back of rent payments. The proposal would be that tenants in these sectors contribute some rent and landlords agree a reduction in payments with the Government contributing the remainder.
A Treasury spokesman said officials “recognise the current challenges facing commercial landlords and the significant impact recent changes are having on their business models”. It remains to be seen whether a furlough type scheme for rental payments is implemented.
