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Worst is yet to come for retailers as debt-collecting commercial landlords begin to circle

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Worst is yet to come for retailers as debt-collecting commercial landlords begin to circle

The British Retail Consortium (BRC) has once more demanded more government support for retailers in relation to the ongoing Covid-19 pandemic.

The body revealed that a total of £2.9 billion has been accrued by the UK’s retailers in property rental debts.

A moratorium currently protects those retailers who have racked up debts, but as things stand that will come to an unwelcome end on 30 June.

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This, the BRC fears, could spell the end for many more retailers, with a reported one in seven shops already lying empty.

A new BRC survey of retailers, meanwhile, revealed that two thirds have been told by landlords that they will be subject to legal measures from July if they do not repay.

Furthermore, 80% of tenants said some landlords have given them less than a year to pay back rent arrears accrued during the pandemic.

The BRC has set out a number of changes it believes the UK Government needs to make to the law surrounding commercial landlords and debt collection, if retailers are to be given a chance of surviving the next year.

These include: ringfencing the rent arrears built up during the pandemic and extending the moratorium on repayment of these debts to the end of the year; extending the protections on these debts to include County Court Judgements (CCJs); and introducing compulsory arbitration from 1 January 2022.

Helen Dickinson, chief executive of the British Retail Consortium, explained: “Many retailers have taken a battering over the pandemic, but they are now getting back on their feet and playing their part in reinvigorating the economy.

“The unpaid rents accrued during the pandemic, when most shops were shut, are a £2.9 billion ball and chain that hold back growth and investment and could result in a tsunami of closures.

“Government must ringfence the rent debts built up during the pandemic, giving retailers breathing space as they wait for footfall and cash flows to return.

“With this in place, all parties can work on a sustainable long-term solution, one that shares the pain wrought by the pandemic more equally between landlords and tenants.

“Without action, it will be our city centres, our high streets and our shopping centres that suffer the consequences, holding back the wider economic recovery.”

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