The collection of rent and service charge payments that should have been paid to landlords in March has stalled according to Remit Consulting.
The firm's research reveals that seven weeks after payments were due, just 75% of rent and 69% of service charge payments have been received from commercial and residential tenants in the UK. This represents an increase of just1% for rent and 3% for service charge over the previous seven days.
Since the beginning of April, Remit Consulting has surveyed six of the UK’s largest property management firms, responsible for nearly 78,700 separate leases on over 18,350 commercial and residential properties across the UK, regarding the collection rates of rents and service charges payable by commercial and residential tenants. The retail sector has been particularly hard hit, with only 59% of rent and 58% of service charge payments having been received. In the residential market, 86% of rent and 67% of service charges have been received by the property managers involved in the report.
“With only a minimal increase in the collection of outstanding rent and service charges over recent weeks, the majority of landlords and property managers have low-expectations that the situation will change between now the next quarter and fear that this could be about as good as it gets. All eyes are now turning to June,” said Steph Yates, a senior consultant at Remit Consulting.
“For many, the June quarter day will represent the perfect storm. Having weathered the ride so far, not only will tenants be receiving their rent and service charge demands for the next three months, but the quarter day coincides with the end of the government’s 90-day moratorium on landlords taking action against tenants for non-payment of rent.
“For those tenants unable, or unwilling, to pay the previous quarter’s bills - the start of the next quarter will be hugely challenging and, for shopping centres and the high street, in particular, casualties have to be expected.”
Remit Consulting has been surveying major property management companies regarding the collection of rent and service charges since 2010.