Legislation has been stacked against property owners – what now?

As attention turns towards recovery, it is time for government to get serious about safeguarding the billions of pounds of private investment that will be needed to ‘build, build, build’ the UK’s recovery over the next months and years. Property owners are rightly taking action to support their tenants genuinely in distress as a result of coronavirus, which means having to absorb significant losses – as the early reports of rental collection for the June quarter day make clear, coming on top of a difficult March. The legislative framework has been stacked against them, with government interventions effectively taking away their ability to act against any tenant, whatever the respective financial heath of the two parties. As with the insolvency regime that unfortunately is likely to come into play more frequently over the next few months, the property industry has been uniquely singled out by politicians for action against its commercial interests. Of course, that is often your and my interests as our savings and pensions are invested in the country’s real estate.      I hope that ministers are now asking themselves hard questions about the impact of their actions. The type of development activity that will be needed to level up and regenerate our town centres already carries a range of risks. Adding political risk into the equation at a time when we will be competing as almost never before for global investment seems at best unfortunate. And if the funds that have relied on stable rental income streams to pay our pensions can no longer do so at the stroke of a minister’s pen, from where else will this and future governments get the investment for the physical fabric of our communities across the country? Fractured relationships While the moratoriums remain in place, ministers must make it clear that tenants who are able to pay their rent should do so. Well-capitalised businesses, and those who have continued to trade from stores during the lockdown or have generated unprecedented levels of online sales but are refusing to pay their rent, are taking unfair advantage over their competitors. They are also directly damaging other businesses more in need of support and ultimately putting town centre investment at risk.  The new commercial property code of practice can provide a framework for rebuilding relationships that have become fractured over the last few months as well as empowering those businesses that have felt unable to engage so far to do so. There is some early anecdotal evidence of this, and I urge anyone who has not yet done so to consider using it. Ultimately, landlords and tenants are commercial partners and need to work together.    The BPF recently submitted its Building a Shared Recovery plan to government to provide an holistic framework including immediate and longer-term policy measures, to feed into both the chancellor’s fiscal event in July and the autumn statement later this year, to better support our industry and customers today and to ensure a more sustainable future for the built environment. We have sought to find the right balance between realism and the bravery and creativity required to deliver a more productive and prosperous future for property, places and people across the country. Fortune favours the bold Government has yet to be clear about how it’s going to align Covid-19 recovery policy and its ambitious environmental goals, but for our sector mitigating climate change needs to be built into everything we do, and conditions could be attached to many of our proposals to drive this agenda and that mean support for buildings and organisations can only be accessed by achieving specific environmental targets. While the next few months are still set to be some of the toughest times many businesses have ever faced, government has a small window of opportunity today to be bold and ensure the next couple of years do not intensify the challenge. In partnership with policymakers and our customers, the real estate sector is ready to play its part. Melanie Leech is chief executive at the British Property Federation