The grant has been proposed by UKHospitality, leisure and retail bodies to facilitate rental agreements between landlords and tenants
The grant is estimated to cost £1.75bn, but would save 375,000 jobs and save the government £7nb in its first year.
It has been proposed by the British Property Federation (BPF), British Retail Consortium (BRC), Revo, ukactive and UKHospitality, who are aiming to solve the rent crisis casting a shadow over the retails, hospitality and leisure sectors.
The trade bodies represent both landlords and tenants, and would see the government investing in the short terms to support businesses and landlords whose properties have closed because of coronavirus.
Without urgent action on rents, many otherwise viable businesses are, through no fault of their own, at imminent risk of failure
Analysis conducted by the trade bodies found that if the government support covered 50% of unpaid rents across hospitality, leisure and retail for just six months, it would cost 1.75bn, but the total return to the treasury in tax revenue would be near £7bn. It would also save 375,000 jobs.
If the rent support was extended to businesses that have already reached payment agreements, the cost would rise to £4.7bn, with a total return of £11bn and saving 630,000 jobs.
Features of the Property Bounceback Grant include:
- Government grants of up to 50% of rent and service charges between March and September
- Grants would be conditional on agreement by the landlord and tenant to account for the remaining 50% of the rent and service charges through the government’s Code of Practice.
- Eligibility for businesses in hospitality, leisure and retail – all sectors that have been disproportionately hit by the crisis and have already seen increasing rates of administration and redundancies
- Focus on those businesses that were closed for the longest and unable to generate revenue
'Many retail, leisure and hospitality businesses across the UK have been closed for months,' the trade bodies said in a joint statement. '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... Without urgent action on rents, many otherwise viable businesses are, through no fault of their own, at imminent risk of failure. Where both landlord and tenant are able to cover at least 50% of the rent owed, and are able to demonstrate they are working together as economic partners, government should have the confidence to invest in these businesses’ futures and prevent the needless loss of hundreds of thousands of jobs.'