The severe effects of COVID-19 and the Lockdown on the property market were spelled out to an online audience at the second Axiom Stone Solicitors Real Estate Virtual Lunch on 8 July.
Topics such as retail and high street uncertainty, the position of restaurants, workplace locations, landlord-tenant tensions, rent arrears, lending issues, dealing with potential insolvencies, redundancies and the furlough scheme plus the Chancellor’s summer Statement and Stamp Duty reductions were all discussed.
This difficult picture was presented to around 100 people attending Axiom Stone’s “Real Estate – COVID-19: Where Are We Now?” event – the latest in the law firm’s popular series of Real Estate Lunches for industry entrepreneurs, lenders and professionals.
Speakers were Alex Brummer, City Editor of the Daily Mail, PR consultant Adrian Pepper, of Pepper Media, Insolvency specialist Karyn Jones, of Shaw Gibbs and Will Clough of auctioneers Allsop alongside specialist lawyers from Axiom Stone.
Setting the scene, Alex Brummer described the current economic situation which was having a twin effect on real estate: both a “high street war” between landlords and retailers over rent and firms considering the benefits of home-working and giving up urban office space. He also referred to the effect this was having on the mental state of the workforce.
John Oliver-Bellasis, of Axiom Stone’s Commercial Property team, said that security of documentation and lending delays were affecting real estate transactions. Landlords were largely sympathetic to the growing demand from tenants for rent concessions and deeds of variation.
Mira Arezina, of Axiom’s Property Litigation team, said that Government action to assist commercial and residential tenants was hampering a landlord’s ability to handle growing rent arrears and creating great friction. Both sides had to realise that they are in a long-term relationship and needed to co-operate and think creatively about solutions, such as extended leases and affordable payments.
Rima Sengupta, the law firm’s banking and finance specialist, explained that the new mortgage market was difficult, but that “Challenger” banks were active with private lenders having greater flexibility. Overall, lenders were cautious due to anticipated falls in property values.
Meanwhile, Rachel Lester, Head of Axiom’s Employment team, believed that this autumn’s end to the furlough scheme was likely to lead to wide-scale redundancies despite the Government’s support package. She had seen a large number of enquiries from employees about settlement agreements and dismissals and warned against firms breaching strict employment laws by bypassing their own procedures.
In terms of the return to work, Axiom Partner Shyam Mistry reminded firms that they needed to carry out a risk assessment of their premises to be COVID-compliant.
More positively, Adrian Pepper thought that the Government’s proposed radical changes to planning rules and Stamp Duty reductions would greatly benefit the economy.
Karyn Jones then talked about conciliation as opposed to conflict suggesting a five-fold guide for landlords which looked to more familiarity with a tenant’s business – such as cashflow forecasts – so creating greater dialogue to ensure a rental income flow.
Finally, Will Clough reported a high level of online activity with 165 deals completed since Lockdown began.
The online meeting was hosted by Jonathan Metliss, Axiom Stone Chairman, with the next event planned for 9 September.
Axiom Stone Solicitors is a full-service law firm and one of the fastest-growing in the capital, with offices in Mayfair, Edgware and Birmingham.