Even tattoo parlours have opened up since lockdown! A request from the Government for profitable businesses to pay their rent is just not good enough. The relief for businesses who are genuinely in distress and unable to pay needs to be far more targeted and landlords do not deserve to be singled out in this way.
Commercial landlords need support not just words from Government. Whilst many landlords have secured mortgage holidays these are often for six months and, given the extension of the rent holiday, banks will need to support commercial landlords with the same extensions.
Very simply, commercial landlords have had little or no income for nine months and don’t have the cash resources to make mortgage payments which will have an impact on the wider economy.
Government needs to provide support and direction. Industry experts have suggested models of combining an element of rent payment, rent deferral and top-up from a Government Fund. Given the levels of support other sectors have received, many of whom are the tenants now not paying their rent, this should he considered urgently.
The success or failure of the commercial property sector is likely to have an effect on us all, whether we know it or not. Between 10-12% of pension fund investments are in commercial property and with this asset class now volatile and not providing the usual consistent returns, ordinary people’s pensions funds will be hit now and for many years to come.
This will place greater strain on the UK Government and stepping in now could provide a solution to this problem as opposed to curing it later.
Whilst the Government has introduced a range of generous measures to support businesses, these have had a common theme of being short-term in their thinking and instant cash.
Little thought has been given to the medium- to long-term impact on the economy and what the consequences could be.
The Government needs to consider supporting the providers of commercial property infrastructure to the UK economy so that they can start to invest for the future; regenerating the high street, providing flexible work spaces, matching properties to the new way in which we work, shop and entertain ourselves.
Severe reductions in pension funds and individual’s personal income in the future will result in the bill still being the Government’s, either through greater social budgets or reduced tax revenues. Why not spend some of that money now to try and solve a problem than simply deal with the aftermath?