With vaccine distribution underway and travel restrictions easing, it’s time to take a look at some of the short and long-term implications of COVID-19 on the UK’s Real Estate Sector.
For commercial and residential tenants, there was temporary relief as the Coronavirus Act 2020 provided protection from eviction. For commercial tenants, the legislation prevented landlord’s from being able to forfeit leases for non-payment of rent. For residential tenants, notice periods were extended in order to provide more respite.
For those looking to get a head start on the property ladder, the stamp duty holiday presented record-breaking months for real estate transactions. The tax break clearly worked as first time home buyers and those looking to replace or add to their property portfolio took advantage of this great opportunity. Despite COVID restrictions, the transition to virtual viewings and e-conveyancing has assisted in streamlining the process.
The hardest hit in the short term by COVID-19 were those in the hospitality real estate industry. Service intensive assets such as restaurants, hotels, amusements parks, and more were all heavily impacted by closures or reduced capacity. Nonetheless, though it may take some time for a complete return to normalcy, those who were fortunate enough to escape bankruptcy have a post-pandemic revival to look forward to.
The transition away from brick-and-mortar stores to e-commerce was expedited by COVID-19. Though the virus was a short term deterrent to high street shopping, generally, consumer behaviour is moving online. In the long run, real estate will see the decline of brick-and-mortar stores but an increase in demand for warehouse space.
In the commercial real estate sector, the demand for office space has been reduced. COVID-19 demonstrated to many that working from home is viable with today’s technology and that downsizing could reduce company costs. Nevertheless, though reduced, the need for office space won’t be eliminated entirely as the community and culture of office dynamics remain integral to employee satisfaction.
Thus, as office demands change with work from home, so do residential demands. With the newfound flexibility of remote working, there has been a shift in priorities with regards to a homeowner’s criteria when looking at residential properties. For example, office room, outdoor space, and proximity to transport links to the city have been prioritized post-pandemic.
Furthermore, given that remote working may become permanent for some, there has also been an increase in those moving out of London or buying a second country home. Many are realizing that if the work can be done remotely, what is tying them to the city? It is time to take advantage of working from home given that flexible working is here to stay.
This article is provided by Burlingtons for general information only. It is not intended to be and cannot be relied upon as legal advice or otherwise. If you would like to discuss any of the matters covered in this article, please contact Caroline Turner or write to us using the contact form below.