The inability of landlords to get their rents paid by businesses who have traded successfully in 2020 will have a long-term impact on investment in commercial property, said tax and advisory firm, Blick Rothenberg.
Heather Powell, a partner at the firm said: “The Secretary of State’s third extension of the rent moratorium to March 31st is welcome.
“However private investors, who own many properties in our High Streets and suburban offices, are really suffering as a result of this policy, which puts their tenants in complete control of their income.
“Whilst these landlords will be able to take legal action to claim unpaid rents from April 21 next year, it is anticipated by lawyers that the landlords will be waiting at least another six months before seeing payment, due to the huge delays that it is anticipated will be encountered in the court system.”
She added that private investors could decide to sell up and find alternative sources of income, driving ownership of UK commercial property to absentee landlords.
Powell added: “I would not be surprised if many private investors decide to sell up and find alternative sources of income, driving, which is not a desirable outcome for UK PLC.
“Large property groups and funds have been able to stop dividends and dig into reserves to pay their overheads – however we should not forget these investors are backed by individuals diligently paying contributions every month into pension plans who are finding their pension pots are declining.
“Many landlords are private investors – who rely on rents as part of their annual pension to ‘live on’. They have been forgotten about due to the perception that all property is owned by large, institutional investors or very wealthy individuals.
“Commercial tenants – trading from shops, offices, restaurants, factories and even logistic centres and supermarkets have been able to avoid paying their rent from March 2020.”