By Property Consultant John Howard share’s his thoughts on dealing with residential and commercial landlords through this difficult period.
Let’s start firstly with the Residential Tenants, most Landlords I think have been pleasantly surprised that most of their residential tenants have paid their monthly rent, despite the Government virtually telling them they don’t have to!
For the ones who haven’t, I’ve tried with mine to be sympathetic and supportive, but explain to them that even if I were to defer the payment of rent, it still has to be paid in the future, so they should make a serious effort to pay now if at all possible. I’m sure many other Landlords are saying the same.
With regards to Commercial Tenants this is a completely different story. With the smaller tenants I’m doing my very best to support them through what is an incredibly difficult period for them.
However, of course they have had all their Rates written-off for 12 months and depending upon what business they run, there needs to be a judgement call on whether or not you think they should be paying their rent rather than deferring it.
As for the larger, National Tenants, I have little sympathy.
Many have not paid this quarter’s rent, just assuming that Landlords will allow them to write-off the rent for at least 3 to 6 months, rather than just defer it. I’m personally holding firm with my own, and asking them to please pay their rent. The consequence of course of them not paying is that in most leases the Landlord can enter the premises after 21 days and take back possession.
I’m sure there’s not one Landlord in the country that wishes to do that, but ultimately that’s what just might get your rent paid!
Looking towards the future I’m sure the residential market and rents will remain the same, and pretty stable going forward.
The commercial investment market may look completely different. With so many people now working from home efficiently and confidently, you do wonder whether some of the larger companies in the UK will be more comfortable with more of their staff working remotely.
I think most people’s answer to that will be yes, therefore there’s likely to be an excessive supply of vacant offices for landlords to deal with.
This will cause huge pressures on the investor. Not only will they be paying empty rates on the premises, they are also likely to be getting less rent eventually – while in the meantime still having to pay interest on their loans against the building.
More people shopping online while shops are closed will ultimately mean more vacant shops, plus the ones that are being let again being let at a lower rent than Landlords are currently getting.
Whatever commercial building Landlords own, if it becomes vacant and you are trying to re-let, then most will be renting it out for less rent; therefore the value of your property will be reduced.
Comments