Government grants for businesses in London forced to close due to the latest lockdown won’t substantially help struggling firms with their rent bills, according to new data.
A number of support measures have been announced for industries that have to close between now and December 2. They are aimed at helping pubs, restaurants and non essential retailers.
For properties with a rateable value- a measure of the estimated rental value of a property- of £51,000 or over, grants will be £3,000 per month, or £1,500 per two weeks.
Business rates advisor Altus Group says the average rateable value in London is £63,460, well above the national average. It calculates that the grant will only cover around 57% of the estimated average monthly rent.
Robert Hayton, head of property tax at Altus Group, said the support is welcomed, but “insufficient to cover average rental commitments in the capital”.
Hayton added: “It is likely to exacerbate the commercial rent debt crisis without further intervention recognising London’s higher property values.”
A moratorium on business evictions is in place to help retailers and bar owners ride out the virus crisis. Some firms have agreed rent holidays or discounts with landlords, but many have not and are concerned they will be unable to pay outstanding rent when the protection rule ends at the end of the year.
A spokesman for HM Treasury said: “We’ve supported businesses in London since the start of the pandemic through our package of grants, loans and our furlough scheme."
He added: “As the PM announced it is now clear that much broader restrictions are needed right across the country to contain the virus, so we have extended our financial support across the UK to help millions of people continue to provide for their families."
The spokesman said this includes business grants of up to £3,000 covering 90% of small and medium sized premises, up to £1.1 billion extra funding for Local Authorities and “our furlough scheme which will continue to support employees in London and across the rest of the country”.
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