A visiting professor and accountancy academic claims landlords are not carrying their fair share of the financial burden caused by the Coronavirus crisis.
Earlier this year Richard Murphy, a chartered accountant and political economist who works as Professor of Practice in International Political Economy at the University of London, urged private tenants to be given “statutory rent holidays” for at least the rest of 2020.
At the time he wrote on a blog for Tax Research UK - which undertakes work on taxation policy for aid agencies, unions, NGOs and others in the UK and abroad - that after such a rent holiday ended: “Thereafter rents should be reduced, drastically, and by law, and right across the board. Eighty per cent cuts may be appropriate. It may be more. Whatever is necessary to ensure business can survive must be done.”
Murphy also forecast earlier this year about owner occupiers “who I predict will see the value of their houses crash in the near future.”
Now he has returned to the Coronavirus theme, again on the Tax Research UK website, saying that: “Nothing has changed. Except we now know I was right. We were facing a massive economic risk at that time the scale of which the government was not appreciating.”
He continues: “And it is still the case that bankers and landlords are not taking their share of the burden in this crisis … [L:andlords] should not be reaping the rewards. This is not a moment to bail out landlords, in particular. This is a moment for people, employers and jobs to take priority. And I still struggle to believe that the government has really taken that message on board.”
In his latest piece, Murphy repeats part of an article he wrote in March - ahead of the spring lockdown - saying: “I have already suggested that should the epidemic spread then as a matter of statutory right any tenant should be provided with a minimum three-month rent-free period to ease the stress upon them whilst this crisis last.
“I would suggest that the grant of that extension should be automatic to anyone who does not make a due payment of rent on the required date during the period of the epidemic. They should be automatically granted this extension by the landlord without having to make any further application or to complete any additional paperwork.
“I stress that the cost of this will fall directly upon the landlords in question. 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.”
You can see his latest article here.