Happy Sunday: 17 February

Posted on Feb 07, 2021. by NTI

There is a real sense of Disney satisfaction in watching clips on You Tube about when a serially-bullied kid with the body mass of a Twiglet finally turns on his assailant with arms like a windmill skeleton flailing and landing a blow on his long-term nemesis. 

“Good on yer,” you say, “that git’s had that coming for months.”

Could this scene be re-enacted on 1 April when the Government’s moratorium on tenant evictions finally ends and landlords, who have felt like victims for so long, are released like a stone from a catapult at full stretch. 

Of course retailers, publicans and restauranteurs feel nervous about the prospect, as they have been able to avoid reality for a long time now (how ago was ‘normal’, again?). It’s true that more than 660,000 hospitality and 170,000 retail jobs have already been lost in the past year, which is an horrific number, but that could be like the opening credits of a horror movie, as the camera pans to the shuttered house on the top of a mist enshrouded hill and the main feature starts.

Tension has been building for some time now, with some well-known names refusing to pay rent even though they still somehow have money in the bank. Boots and JD Sports are the headline makers in a category well-stocked with many other household names who would claim (should they be given the chance) to just be looking after the interests of their members and creditors by ‘doing what has to be done’. And what has been ‘done’ is landlords in this nightmare scenario for property owners.

An example is the leisure chain Brew Dog, who it could be claimed do not deserve to be saved with a name such as that. BrewDog has asked landlords to forgo rent until June in exchange for extending its leases for 12 months. “It’s a very fair proposal, and leaves the majority of the financial pain and heartache with us while the pubs are closed,” said ‘Doggie’ David McDowall, its chief operating officer. Not all landlords have been amenable. One accused BrewDog of “taking the piss”.

However, it is all part of the new ‘landlord and tenant game of life’ in which, it is claimed, some companies have been taking advantage of the chaos. “Retailers will just pay less rent because they know that if the landlord kicks them out, they will have to offer a new tenant 12 months rent-free anyway,” one high-street boss said.

(Mind you, it could be argued this is a ‘level playing field’, a sporting environment many landlords may neither recognise nor have a term for.)

We have to reluctantly go to Birmingham for a great example of this. No less a landlord than the Bullring owner Hammerson, said it had collected just 41 per cent of the rent it was owed in the UK for the December quarter. Asking Tracee this morning, she reckons there is now £4.5 billion of unpaid rent outstanding, and she had to get her calculator out for the last part of that number.

Kwasi Karteng, the Business Secretary who has only just got used to the pronunciation of his own name, has got a job on. Does he extend the period of moratorium this spring, or proceed two metres beyond the cliff edge and watch tenants fall amid the rocks of multiple CVAs or worse?

At this point a literate Waterstones boss James Daunt, gives his view (while recommending Raynor Winn’s ‘The Salt Path’ as an excellent read for the end of lockdown): “The Government’s failure to do anything on business rates is mind-boggling ... how long can they go on year after year, wringing their hands and saying, ‘We’re thinking about it’? It’s pathetic.” He warned that Waterstones would close about 80 of its 290 shops when leases expired unless business rates were reduced.

So, Kwasi, you have quite the conundrum. He says that his mate at the head of the Treasury will outline the next stages of its “plan for jobs to support businesses and families” in the March budget: “That has been our priority throughout the past year and it will be the priority for the year to come.”

Nothing specific on tenants and rent then? Hmmm, it’s going to be a bloodbath. 

Meanwhile, the Bank of England are frying other fish. They say that up to half of the £45 billion in loans to businesses under the bounce back loan scheme could turn sour, which puts each of the adult population of the United Kingdom £1,125 out of pocket. Sam Woods, chief executive of the Prudential Regulation Authority, said that taxpayers face a “significant loss” from the state-backed loans rushed out to small companies during the pandemic, warning banks that the “tougher bit is coming”.

Cheers, Sam, that is the perk we need at this ‘difficult time’. Just when there is so much to look forward to we need to be brought down to Earth. If Rishi could just leave us an address to send our contributions to we will get right on it.

Happy Sunday.

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