FSB argues for commercial property reform

One in seven Scottish businesses fear they won’t be able to make rental payments during the rest of 2020, according to a Federation of Small Businesses (FSB) survey.

Over the winter and into the spring, the small business campaign group wants more commercial landlords to offer rent discounts, deferments and holidays to their small business tenants grappling with the coronavirus crisis.

Their new poll shows that seven in 10 (68%) Scottish rent-paying businesses have been forced pay rent as normal throughout this crisis, with only about a quarter of firms (23%) able to negotiate some variety of compromise with their landlord.

Andrew McRae, FSB’s Scotland policy chair, said: “Over the course of 2020, Scottish businesses located in high streets, office blocks and industrial estates have faced everything from disruption to temporary closure. Many of these firms have seen a collapse in their income, while other have not been able to use their premises since the start of the year.

“Feedback from our members suggests that some landlords have done the right thing and offered flexibility to their small business tenants. Other landlords, however, have offered no such help and have piled pressure on local operators.

“As we move into the next phase of the pandemic, we want to see more landlords share the burden of this crisis with Scotland’s small business community. We want to see these property-owners, and their representatives, get in contact with their tenants and pro-actively offer help to see them through the winter. While the Scottish Government has introduced some measures aimed at strengthening tenants’ hand, many small businesses have told us that their landlord has refused to budge.”

Looking ahead to next year’s Scottish Parliament elections, FSB wants the next Scottish Government to deliver commercial property reform, including action to see widespread adoption of a standard small business lease. They want to make it more affordable for smaller firms to take on empty units, and would like to see new initiatives to help independent businesses negotiate with large landlords and their agents.

Andrew McRae said: “This year’s crisis will have a dramatic impact on how we use property in Scotland. And we already faced a problem with long empty units well before the coronavirus crisis.

“To bring vacant properties back into use, we’ll need all sorts of firms choose to take-up space. But at the moment, many small businesses report that they feel that the commercial property market is stacked against them. The lack of flexibility and understanding shown by some landlords during this pandemic reinforces our view that reform is required.

“That’s why we’re looking for the winners of next year’s Scottish Parliament election to put commercial property reform high on their agenda. Changes on this front are key to injecting new life into our high streets, city centres and local communities.”

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