Retailers, restaurants, bars and other smaller firms heaved a sigh of relief after the Government said they cannot be evicted for not paying rent – for now.
The measure was first introduced in March after non-essential businesses were forced to close their doors and was due to expire at the end of June.
It has now been extended for a further three months in a new code of practice aimed at diffusing tensions between firms and commercial landlords. It prevents property owners from evicting businesses if they do not pay rent.
Business Secretary Alok Sharma said: “We want as many high street businesses as possible to emerge from the pandemic, in the best position to bounce back.”
However, Julie Gattegno, a real estate disputes partner at law firm CMS, warned: “Tenants with the means to pay or refusing to engage risk action and should not be rewarded with an extension to the temporary restrictions.”
The code, most of which is voluntary and is therefore not legally binding, has also banned winding-up petitions against businesses that cannot pay their bills due to coronavirus.
The slump in sales that ensued since March has meant that many firms are struggling to stay afloat, with little or no cash coming in.
Meanwhile, only 15pc of the £2.5bn owed by businesses in their quarterly rent bill due on Wednesday is expected to be paid, according to the British Property Federation. That could send some big property owners to the wall and trigger bitter legal battles when coronavirus restrictions are lifted.
Tensions have been brewing between retailers and landlords as the former seek rent holidays or a switch to turnover-based rents. Fashion retailer All Saints is one that has made such a request.
Helen Dickinson, chief executive of the British Retail Consortium, said that although the temporary measures were welcome, many retailers could not afford to pay back rents and more needed to be done to protect them.
Kate Nicholls, the head of UKHospitality, agreed: “We remain of the view that further time and support is needed to facilitate a recovery for the hospitality sector.”