When the history of Covid-19 comes to be written, how people behaved will be remembered.
Businesses will be held to account, too. We were delighted at the end of last year to publish the story of how our members have been supporting their local communities as part of our Redefining Real Estate programme.
Redefining Real Estate recognises that expectations on us as a sector to better serve our communities are only set to grow. We knew this was a challenge that we needed to rise to, but didn’t realise how perceptions of our industry would shape the government’s actions as the pandemic struck.
The terrible stories from India make it clear that the world still faces a grave threat from Covid-19. Yet in the UK there are definite causes for optimism. The government’s roadmap and vaccination programme are on track. Bars and restaurants with outdoor spaces are booked up for weeks ahead and an economic bounce-back is predicted.
Against this background, there should be no question that the moratoriums have now run their useful course and should end. There is no justification for continuing to deprive millions of pensioners and savers invested in property of their income – and every reason to make sure that confidence is restored to the real estate sector so that investment can be unleashed into rebuilding town centres.
The size of the rent arrears that have built up over the past 15 months is eye-watering – and the government is reasonable to ask how these will be dealt with once the moratoriums are lifted. A chunk of that debt is owed by large well-capitalised businesses that have deliberately withheld rent. The government must not let them off the hook. For the rest, the evidence suggests that the minority of tenants who still have not reached agreement with their property owners have little to fear.
Evictions are not in property owners’ best interests – they don’t want empty premises and a loss of footfall to the buildings they own. Moreover, it’s clear that the retail market is resetting fast. Rents are coming down and more creative partnerships that work for both parties are being agreed.
So why is the government consulting on options to extend the moratoriums and create complicated mechanisms to manage a process for which a straightforward path already exists through the courts?
We are being asked to provide additional reassurances, which is why two of our members, Landsec and British Land, have developed a proposal to respond to the call for evidence. This restores normal market conditions from June’s quarter date, but ringfences arrears so that the market can be restored.
It also offers a process to achieve fair rental settlements for the hardest-hit tenants from property owners who are in a position to do so, as well as ensuring that there is a backstop of independent arbitration for resolving the most intractable negotiations.
I’d urge everyone to support these principles for bringing the moratoriums – and their legacy – to an end.
Melanie Leech is chief executive of the British Property Federation