Commercial landlords suffer due to late payments

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 third extension of the rent moratorium by the Secretary of State until March 31 is welcome.”

“However, private investors, who own many properties on our main streets and suburban offices, are really suffering as a result of this policy, which puts their tenants in full control of their income.”

“While these landlords will be able to take legal action to claim unpaid rents from April 21 next year, lawyers anticipate that the owners will wait at least another six months before seeing payment, due to the huge delays that are anticipated. You will find it in the judicial system.”

She added that private investors could decide to sell and find alternative income sources, pushing ownership of UK commercial property to absentee owners.

Powell added: “I would not be surprised if many private investors decide to sell and find alternative sources of income, lead, which is not a desirable outcome for UK PLC.”

“The big real estate groups and funds have been able to stop dividends and draw on reserves to pay their overheads; however, we must not forget that these investors are backed by people who diligently pay contributions every month to pension plans and find that their pension funds are shrinking.”

“Many landlords are private investors, who depend on rents as part of their annual pension to ‘live’. They have been forgotten due to the perception that all properties belong to large institutional investors or very wealthy people.

“Commercial tenants – merchants in stores, offices, restaurants, factories, and even logistics centers and supermarkets have been able to avoid paying their rent as of March 2020.”

“I feel like the government has not done an effective enough job to help commercial landlords. They continue to suffer the worst consequences of the rent ban, they have lost a living income, and many of them have had to file for bankruptcy.”

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