Under his Twitter title, TV star Piers Morgan posts one of his favourite sayings: “One day you’re cock of the walk, the next a feather duster.”
It’s a long time since he has been a feather duster – it’s more than 15 years since he was sacked as editor of the Mirror – but I can certainly relate to it in terms of my political career.
One minute, I was at the heart of winning a national election, elected an MEP from a standing start. Seven months later, we didn’t win a single seat in Westminster. Such are the vagaries of events and different voting systems.
The same expression applies to the property industry this year. After the Tory landslide, we entered the new year with optimism. We seemed to be heading for at least five years of stable, business-friendly government. Global investors would open their wallets to UK commercial property at precisely the same time as occupiers started to dust down expansion plans.
Then the pandemic struck, an unprecedented event that began on the other side of the world and has changed everything. How many of you had a pandemic in your business-risk contingency plans? Not me. The whole economy is locked in a fridge. Unless something changes pretty quickly, the fridge may become a freezer.
Almost all industries are negatively affected, including the property world. Occupiers cannot work, cannot trade, so cannot pay their rent. Many are in danger of going bust. Quarterly rent collection figures are something of a horror show for many landlords, especially in the retail, hospitality and leisure sectors. Residential tenants will struggle as unemployment soars towards 10% and beyond.
I have never been so worried about the long-term impact of short-term government decisions. Inevitably, given the unprecedented nature of the pandemic, mistakes have been made, but we are where we are.
Rightly, the government bought time with a three-week lockdown to suppress the spread of the virus and allow time to build NHS capacity in ICU beds, ventilators, testing, PPE and more staffing.
The health service is now better placed to deal with any surge.
There is no risk-free option from here. Staying at home for 12 to 18 months until a vaccine is ready is ironically the greatest overall risk. The debate has already moved on to ‘lives versus lives’ and the question of how much we are prepared to sacrifice for whom – and how many. The trouble is that the longer we shut up shop to prevent the spread, the more lives are ruined in different ways. These are agonisingly difficult judgements for our politicians to have to make.
Doctors are now realising that demand for normal NHS services and operations has plummeted. Cancer, cardiac and other patients are dying at home, fearful of going to hospital for risk of coronavirus infection. Domestic abuse is soaring, suicides are up and mental health issues are mounting. Children are being damaged, especially those in the poorest parts of society. More lives could be lost or damaged by the cure than by the disease.
Yet the government is too frightened even to discuss with the nation a plan on how and when to ease the lockdown. The absence of the prime minister, as he recuperates, has created a dreadful leadership vacuum. As every week goes by, so the economy will sink further. Other countries are already opening up in a gradual way, yet we are many weeks from the same.
Landlords will have to play their part. We must be creative in different ways to keep occupiers afloat. Rent holidays in exchange for removing breaks and extending leases have already helped some of my occupiers. If necessary, I would happily look at taking small equity positions instead of rent. Downward pressure on rents is inevitable. The office sector will suffer from more home working as we all become Zoomers.
The eyes of the media and public are on the industry and on how we behave. They want to see us sharing the burden. It won’t take much in the way of excessively aggressive tenant management for a landlord to end up a target in the Daily Mail.
Our industry lobbying groups must urge the government to ease the lockdown. The chancellor is being browbeaten by other ministers. Write to your MPs now; they need help in understanding the massive damage being caused to others’ lives and businesses.
Dreamers believe in a V-shaped recovery. Realists know it will be a gruelling, uphill marathon. The sooner we start, the better.
Richard Tice is a partner at Quidnet Capital Partners and former MEP