The property market saw a lot of change in 2020 as the coronavirus pandemic swept through the UK as well as around the world. We have heard lot about the residential market and people leaving the city for rural properties, but what about the commercial property market? That too has seen some changes.
Many companies have lost business since the COVID crisis struck. Some have not survived, and others are seeing significant changes to their working practices. Employees who can work from home are doing so, which has resulted in office space, retail outlets, and hospitality venues standing empty. While there may be some return to office space when we establish the ‘new normal,’ there is no doubt that there will be an increased demand for remote working.
This could see demand for downsizing commercial space, even when there are hybrid options on the table of some office and some home working. The Financial Reporter outlines why the demand for residential property continues to grow.
RICS (The Royal Institution of Chartered Surveyors) shares their thoughts on the impact on the construction industry. If you are considering taking on commercial property in the coming months in the capital, commission a building survey London expert, someone who knows the area as well as the sector.
When you come to carry out the building survey London has lots of qualified practitioners. Be sure to do adequate research to find the right surveyor for you.
Sadly, whilst a lot of commercial property is already standing empty as businesses have folded in 2020, more are set to collapse in the coming months. This could be particularly prevalent in high profile sectors such as retail and hospitality.
Things are tough for tenants, though they are also tough for landlords. There is some support available depending on specific circumstances. In the first instance, the government introduced measures attempting to support business tenants, and those continue in line with the national lockdown restrictions. The support protects tenants from repossession of the premises in the event of rent non-payments, though the reaction of landlords has varied from compassionate to ruthless.
This situation could provide an opportunity for the introduction of much more flexibility in leases. This could mean more break clauses that will fall in favor of the tenant, or much broader clauses around ‘permitted use.’
Landlords will be expected to offer more flexibility in general, given the uncertainty for many industries over what the future holds. There could be wholesale changes to the Landlord and Tenant Act 1954 in light of the COVID-19 impact, which could remove some of the current grey areas that have allowed landlords to interpret the rules differently.
There will be more upheaval and changes to come, though it should give way to opportunities to review and make fairer the legislation relating to commercial property. Demand to buy property is likely to be lower than in recent years for some time to come.