“Property owners will be braced for even further pain today, with June’s quarterly rent on commercial property likely to see a significant shortfall in payments from cash strapped occupants. Consumer businesses including retailers, pubs and hotels, are front of mind of course, having been disproportionately impacted by the pandemic’s social distancing restrictions.
“COVID-19’s impact has spanned several months now, meaning even fewer businesses will be in a position to pay landlords the rent that’s due. Intervention by BEIS – blocking landlords from issuing statutory demands and other vehicles of pressure for those that haven’t paid – has now also been extended, which will inadvertently exacerbate the issue of non-payment of rent. The key remains distinguishing between those that choose not to pay and those that are truly unable to do so, which isn’t as clear-cut as it may seem.
“Rental payments are a prominent expense for most businesses. This in turn significantly exposes property owners to the financial stress or distress faced by their tenants. It’s vital that landlords and occupants have a close working relationship and a mutual understanding, which is something that will now be aided by the Code of Practice MHCLG issued recently. That said, we can’t overlook the precarious position property owners are being left in currently, with little alternative but to absorb the strain being felt by their occupants. It doesn’t stop with landlords either, we have to remember that this will in turn have an impact on those invested in property, including savers as well as pensioners.”
Notes to editors:
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About KPMG in the UK
KPMG LLP, a UK limited liability partnership, operates from 21 offices across the UK with approximately 17,600 partners and staff. The UK firm recorded a revenue of £2.40 billion in the year ended 30 September 2019. KPMG is a global network of professional firms providing Audit, Tax, Legal and Advisory services. It operates in 154 countries and has 200,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.