Retailers in the UK have paid less than 15 per cent of their rent, according to initial figures from Wednesday’s quarterly payment date, piling pressure on landlords whose incomes have been cut deep by coronavirus ... Retailers paid just 14 per cent of the rent due, compared with 20 per cent at the same point after the March 25 payment date, leaving landlords waiting for £2.15bn in unpaid rent for the June quarter.BQ will hopefully illuminate this further: but even to the mere spectator this is obviously massive. Here are a couple of aspects that occur to me.
1. Impact on Local Authorities
A number of councils have been pouring speculative money into commercial property, borrowing heavily to do so (at very low rates - for the time being). But it's Northern Rock syndrome: they are borrowing short-dated money to invest in long-term "assets". Yes, there's been an arb there for them - and they are propping up thier expenditure with it: but it is SPECULATION. Nemesis awaits.
BTW, this stupidity used to be illegal for Local Authorities. Who let them do it? Yep, you guessed: it was George Little Git Osborne, in 2011.
2. Property Market Generally
We've all probably read stuff recently about how residential property is set for a mini boom. Well, during Lockdown people have saved up all that money and repaid their other debt. And people will be eager to move away from the dangerous city, to one of those innumerable white-flight, on-the-ringroad housing developments close to a nice county town, with green fields to look out on (until the next tranche gets built). Oh yes, there's pent-up demand for housing out there ...
This whistling-in-the-wind is the merest bollocks. Immediately adjacent sub-sectors within the same part of the economy ain't ever gonna be counter-cyclical. In a big downturn, most things correlate. It reminds me of an eejit I saw on the telly during the '07-09 Financial Crisis, interviewed on a news-piece about falling car sales. He opined that although sales of new cars were collapsing, and prices falling, "the price of second-hand cars will go up, because people will always want to buy a car - and when they can't afford a new one, they'll go for second-hand".
Hoho. Nope, when there's no economic activity, there's no economic activity. (And there's quite a few less people, too; and of course all those former granny-houses to shift.) Not many mortgages available to the unemployed. And even if the estate agents' windows don't reflect it just yet ... they will.