A prominent economist who has called for a raft of measures to protect tenants during the Coronavirus crisis is now calling for a legally-enforced 20 per cent reduction in all rents – residential and commercial.
Richard Murphy, a chartered accountant and political economist who works as Professor of Practice in International Political Economy at the University of London, writes on the website of the think tank Tax Research UK that such a statutory rent reduction would be “a minimum”.
And he adds: “I’d also suggest rent roll up with liability due over a period eight times longer than the length of the period over which deferral takes place would also be appropriate. I would match this with a right to claim a mortgage payment holiday to match. Landlords could survive this. Their tenants cannot.”
Earlier this year, as the Coronavirus outbreak became widespread in the UK, Murphy advocated rent-free periods for tenants and made it clear that he believed landlords could survive the costs.
“I am quite deliberately suggesting that they should bear the heaviest burden of dealing with the epidemic. The reason is simple and is that whatever happens they will still have an asset at the end of this period, and no other sector can guarantee that at present. As a consequence they have the greatest capacity to bear this cost. And, if it so happens that some landlords do fail as a consequence, the assets that they have owned will still exist after this failure and so the economy can manage the consequences of this” he wrote at the time.
Murphy works as Professor of Practice in International Political Economy at the University of London. He has also founded a range of networks campaigning for tax and economic reforms.
This post has originally been featured in Letting Agent Today.