Northern Insight sometimes asks people to write about fairly solid matters; in the past I have given contributions with my thoughts on Energy Efficiency, changes in the High Street and of course a couple of blurbs about myself. But this time they've asked me to write about something I think is fairly fluid, and I'm not talking Merlot or Real Ale
They asked if I could write on how coronavirus has impacted on property values. Now if I had penned this on Monday 14th September, I might have said something different to what I might say today, the 21st September. Because in the interim we have had ‘local lockdown.’ By the time you’re reading this, things will have changed several times again.
I’m not going to get into a politically charged opinion piece about how serious coronavirus is, or whether the media has whipped everyone up into an unnecessary frenzy, but the result is the same. A lot of retailers felt during the national lockdown, and are feeling again, that this is a plague on their businesses. With restrictions on numbers allowed in shops, with some openly flouting all regulations and some taking them to extreme with constant sanitization, it’s made business for many retailers difficult. In August I said that there will always be a demand for shops because some items are more “touchy feely.” I stand by that, and of course the hospitality trade has been hit – who wants to go to a pub and not be allowed to talk to your mates? I am aware that many restaurants were at one time saying it made for better management when eating was by reservation only, but if numbers in parties are limited, this takes away a significant element of the eat out trade. Less trade = less profits = less rent.
And here’s the plague on the second house. Some retailers have been able to secure grant funding towards overheads, but those with Rateable Values in excess of £51,000 have not. And this includes most of the prime shops and leisure businesses in Newcastle, Sunderland and Durham. These businesses have been hit hard and it’s difficult to see how they’ll get back out again. So, a number of retailers have said to landlords “Can’t pay, won’t pay.” Landlords don’t qualify for any grant assistance and this is hurting many of them badly. Before anyone goes on about “evil landlords”, just be aware you may sometime benefit from one. Eldon Square is 40% owned by Newcastle City Council, and the rents from here subsidise Council Tax for many of us. The Galleries in Washington is owned by M&G who provide ISAs to millions of small investors. Aviva Insurance have significant property holdings.
Quite apart from the tax implications to pay for all the aid that Rishi Sunak has delivered, I feel the economic plague of coronavirus is going to be felt for a long time into the future, even as we do adjust to what I called last time a “new world”.
