Monday property news update - 21 June
The retail rent battle, asking prices slow and London retains the crown for financial services
2 minutes to read
The commercial moratorium
Plenty of reporting over the weekend and in this morning's papers sums up frustration among landlords over the government's decision to extend the commercial rent moratorium until March 2022.
The government has pledged to introduce legislation in this parliamentary session that would implement a ring-fencing scheme to protect certain COVID-19 arrears and create a binding arbitration backstop to deal with these if agreement cannot be reached.
In his latest note, Stephen Springham unpacks the available details. The new measures will only protect rent arrears owed by those occupiers who have been impacted by closures (i.e. “non-essential” retailers, but not office and logistics occupiers). Debt accumulated before March 2020 and after the date when relevant sector restrictions on trading are lifted will be actionable by landlords as soon as the new primary legislation is in place.
There isn't absolute clarity as to when this will be. Although there is an implicit message that protection will only apply to historic arrears rather than any that may accrue going forward. As Stephen notes, the word is that it is still the Government’s intention that ‘can pay, should pay’ occupiers should not benefit from the new measures. However, it is not clear how this will be policed.
Financial services
A new survey from EY finds Britain attracted investment in 56 projects in the financial sector last year, the most in Europe.
That's 43 fewer than 2019 but still seven more than France, which came in second. Britain also accounted for £1 in every £5 of global financial services investment in Europe, down from £1 in every £4 in 2019.
“While its lead may have narrowed, most likely only short-term in response to pandemic-related business disruption and Brexit, investor sentiment suggests that the UK is looking to a strong future, and will continue to outperform the rest of Europe,” says Anna Anthony, UK financial services managing partner at EY.
House prices
In a tentative sign house price growth may be slowing, Rightmove said UK asking prices climbed 0.8% between mid-May and early June, down from a 1.8% rise a month earlier.
That takes asking prices about 7.5% above their level in early March 2020, before the first lockdown.
We have Tom Bill on hand explaining why the end of the stamp duty holiday is one reason that supply should start to build later this year and house price inflation return to single digits.
In other news...
In a new Rural Update, Andrew Shirley covers the new Australian Free Trade Agreement.
Elsewhere - The new bank with £22bn to spend on levelling up and turning Britain green, the Delta variant threatens EU's Covid vaccine progress, HS2 costs rise by a further £1.7bn during pandemic, Johnson faces backlash on planning reform after by-election loss, and finally, cities starved of billions by staff working from home.
Photo by Joe Stubbs on Unsplash