Sector: Property 

Topic: Coronavirus 

Landlords Union – Property tycoons negotiate for Covid-19 support

By Richard Kleiner

21 May 2020

The “Landlords Union” – described by the Times as ‘Britain’s most unlikely trade union’ – is a group of 30 property investors that have joined together to ask the government to alter its rescue plan for the high street and private sector. 

For many commercial tenants, cash flow has dramatically reduced, and they are unable to pay their rents, as a result of the Covid-19 pandemic. To protect these businesses, the government enacted key legislation which prohibits landlords from using ‘aggressive tactics’ to collect rent, evicting tenants that cannot pay rent due to the pandemic and issuing statutory demands, for three months. 
Spokespeople for the “Landlords Union” stated in a Times article that this legislation puts the onus on them to provide “a financial backstop for huge swathes of the economy”. Additionally, they argue that certain tenants who can pay will take advantage of this legislation. 

At Gerald Edelman, we have a significant number of clients that operate within the industry. Whilst the Union is comprised of high profile, high net worth investors, we have endeavoured to understand whether smaller industry players are in agreement with the group’s premise. Therefore, we conducted a survey to obtain their opinions. 

Do our clients agree with the premise?

The first question we asked our clients was ‘How do you feel about the Union?’. 72.4% of respondents stated that they fully agree with the Landlord’s Union and its objective. The general consensus is that the Union represents a unified voice for the market, regardless of the stature of investors involved. 

One participant argues that, although the Union’s efforts would trickle down to the smaller players, ‘many landlords work on small margins’ and ‘have risked everything to invest in property’ and so, should be effectively protected from the economic downturn. 
24.2% of respondents agree with the principle but have some reservations. For example, three respondents suggested that the Union is unlikely to attract any public sympathy as it often has been reported to be run by high net worth investors.  

One of the key points that the group raised is that there are certain tenants, including large companies with healthy cash flows, that are able to pay their rent but are using the government’s legislation to avoid paying. As one of our respondents asserted, ‘[without sufficient information] how can you distinguish who can and cannot pay rent?’ 

Potential solutions 

Members of the Union are deliberating with the government in an attempt to change its approach in connection with the protection of tenants. The group argues that the current measures in place to protect tenants but will ultimately damage landlords in the long run. 

We asked our respondents what their top three suggestions are for the government to support landlords. The below table lists the six most popular responses.

Solutions suggested by respondents Number of responses in support (%)
Government to provide landlords with specific financial support 44.8
Reduction or abolition of empty rates (where applicable) 37.9
Tax rebates/relief  27.6
Holiday or deferral of interest or loans from banks 27.6
Financial justification/application for rent holidays or reductions 20.6
Change in government legislation  20.6


Interestingly, the most prevalent suggestion was the introduction of financial aid. The extent of this varied widely, from the ‘government should pay the full rent that tenants fail to pay’ to ‘rental furlough’ to an unquantified form of financial stimulus to support the market. 

Although this is the most popular solution, it seems this could be difficult to implement. The Office for Budget Responsibility estimate that current Coronavirus support measures will cost the UK £298 billion, with £34.3 billion spent on business support. The Landlords Union will need to provide substantial justification for the government to consider offering additional funding, specifically for the property market. 

One notable anonymous response also suggested that the government should afford business rates relief should to all properties, not just specified sectors, “where the businesses are unable to trade from the premises or have suffered financial difficulty due to the Coronavirus.” This would give many more tenants some monetary leeway, which could be put towards partial rental payments.  

Longevity of these potential solutions

Following on from the above, we posed the question, ‘how long should government support to landlords last?’ 

Given the current environment, the enactment of the government’s three step plan to rebuild is conditional, so there is still a great deal of uncertainty regarding when we will get back to normality. Therefore, 65.5% of respondents say that it is not possible to quantify how many weeks it should last for, rather they suggest it should also be dependent on ‘the duration of the crisis’ or for ‘as long as the directive to the tenants on rent holiday continues’. 

6.9% say support should last until the end of 2020 and 10.3% say it should extent to at least 12 months.  

A pertinent question raised by one respondent was, ‘how long can the government afford to support all the current largess before it goes “bust” itself?’

Do banks hold a portion of the blame? 

62% of respondents believe that banks are not to blame whatsoever, citing that they have stakeholder interests to protect and are largely in the same position as landlords; with many businesses likely to fall into insolvency or bankruptcy, ‘their loans are clearly in danger’. 

24% believe that banks could do more in this situation. Some suggest that the government should force banks to offer commercial landlords loan payment holidays, just as tenants have been afforded rent holidays. This would split the responsibility between the two interested groups. 

An anonymous respondent identified a ‘Catch-22’ scenario that is emerging: if banks do not provide some form of relief, then landlords will not be able to negotiate rent reductions, which may result in many tenants going into insolvency. Consequently, landlords could have empty properties, impeding their ability to repay their bank loans. Thus, all three parties involved are in jeopardy. 

Another participant goes further, explaining that as landlords have to continue repaying loans whilst receiving significantly lower revenues, tenants will gain a more powerful position in future negotiations, ‘as they can hold out for a desperation deal from smaller landlords who will need cash flow to survive themselves.’

10% believe that banks hold significant responsibility. However, these respondents did not elaborate any further. 

Anecdotal examples

48.3% of respondents have reported being directly affected by the legislation, with tenants withholding rent and, in some cases, unwilling to negotiate. 

Three individual clients have provided anecdotal evidence which supports the idea that SMEs and sole traders are ‘acting responsibly’, making an effort to pay any rent that they can, whereas large multiples are using the legislation as ‘an opportunity to try to skip rent payments altogether’.  


Pointedly, response says, ‘it is […] morally and legally wrong to ask that landlords bear the financial responsibility for the hardship of their tenants.’  

The results from our survey indicate that landlords are more than likely to agree with the Landlords Union’s principles. They also assert that this collective is likely to gain little sympathy from the general public as the group is, at least in part, comprised of multi-million net worth investors. Although, this should not necessarily impact the government’s decision making. Our clients do largely support the idea that the government need to rethink their approach to relieve the strain on landlords.

To conclude, one respondent stated, ‘landlords are invariably treated as soft targets in times of crisis.’ 

Have your say 

Are you interested in leaving your opinion too? Our survey is still open, so please leave your responses here.

Data collection disclaimer

The purpose of this survey was to obtain opinions on the Landlords Union from industry stakeholders. The survey was conducted using open ended questions to allow participants to give their full and honest opinions on the subject. We contacted a select few clients and received 29 responses.

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