Hello, this is Jim and I’m a dual-qualified lawyer (UK & Republic of Ireland) happy to help you today.
The company should not be charging you for a service which they cannot offer. The essential term to the contract you have with them is that you pay them - and in return they provide the accommodation.
If one of these essential terms is not able to be carried out, in this case due to an external event being the pandemic, you can refuse payment and suggest that the contract is "frustrated". The external event, being the pandemic, has made contractual terms impossible in some areas - accommodation is one area which has had a big impact. This is out of your control - no cases have been decided at court as yet as you can appreciate so we can only go off the contract laws - but you can say the contract is frustrated due to the pandemic.
Therefore, you would be within your rights to withhold payment and cancel the contract.
If they dispute this, threaten them with a report to Trading Standards (tel: 03454 040506). If they threaten anything else such as court proceedings (which would be unlikely, especially as most court cases are not now going ahead) then come back to me - I can assist with any response to the claim.
In the meantime you can use the attached template, tailor it to your situation and see if it works.
I hope this helps? If you would kindly leave me a 5 star rating (at the top of your screen), the question will stay open and any follow up questions are welcomed.