COVID-19, Update for U.K Property Owners.

In line with our promise to provide regular updates during these unprecedented times, it has become necessary to shed light on issues of importance that may affect you, your property and business in this ever-evolving environment due to the coronavirus pandemic. 

Possibility of missed payments by tenants

The service industry contributes 80 percent to the GDP of the United Kingdom. The recent government advice for citizens to adhere to social distancing strikes at the heart of the industry and will have a devastating impact on business revenues and ultimately staff earnings, “ Now is the time for everyone to stop Non-Essential contact with others”. The Confederation of British Industry informed Downing Street’s Business, Energy And Industrial Strategy Committee that tens of thousands of jobs are at risk and this is a critical time for British Business. The impact of self-isolation will be felt more by the country’s 2 million self-employed and for those working within the gig economy. e.g Uber drivers, cleaners and creatives who are more reliant on independently driven income.

How can we prepare for this?

Most major high street banks have announced plans of potential mortgage holidays for a period of three months for property owners who fall sick or must self-isolate and we are expecting that this relief will also be extended to landlords. 

We will be following all guidelines outlined by the government during their daily news briefings. So far, the Treasury have today pledged “an unprecedented ￡330 billion guarantee to support businesses”, extending business rate holiday to businesses in the hospitality sector for a Year and ￡30 billion in support of the NHS. Further measures include; plans to underwrite bank loans to encourage lending to affected firms and offering "hardship funds" which involves giving cash handouts to businesses to which banks refuse to lend.

The Bank of England also announced a cut in interest rates by half a percent from 0.75% to 0.25% last week to support the government with their plans. 

We are also creating enhanced measures to detect fraudulent evasion of rent. This includes scrutinizing the employment category of vulnerable tenants to establish if they are truly at financial risk and retrospective threats of litigation if claims bear out to be false in the long run.

Wider Property Market

It’s yet to be ascertained what the impact of the virus would be on the wider property market, but we can presume that transaction volumes would go down as people seek to interact less with one another. We’ve already seen cases of Valuations being canceled and sales being aborted as well. We’ve also seen creative workarounds such as the Savills Auction for March billed to be held entirely online and enabling remote bidding for properties, this may not be practical in all areas, but is a positive way to tackle events. We are however closely monitoring this and would update you as events unfold. 

U.K Economy

The government has dramatically loosened the purse strings to combat any potential slowdown that COVID-19 will bring to the economy. It seems inevitable that Schools and Universities will close. Mass gatherings have already been cancelled. Transport for London and all other relevant bodies have increased disinfection of stations and are testing materials that should make stations Virus proof for up to 30 days, so we foresee a slower arrival at a decision to suspend all public transport, which is quite important to the continued functioning of the country’s economic engine. The Mayor of London Sadiq Khan recently announced that the tube will be running a reduced service imminently. The latest announcement from the Foreign Commonwealth office for British Citizens is that all air travel unless essential should be cancelled over the next 30 days. 

Our offices are open and functioning as usual and we are here to respond to all queries you may have.

March 2020