Monarch gathers insight on the economic aftermath of COVID-19, the potential fall-out in the housing sector and how social landlords and housing associations might prepare.
The cost of coronavirus
The coronavirus pandemic, and the social distancing measures to combat its spread, has caused societal disruption on a scale without equal this century. While necessary, these measures present unique challenges both to the country and its citizens.
The challenge for many is simply survival, with over 9 million people now furloughed under the governments Job Retention Scheme (JRS) and many others simply being made redundant, the costs of living becomes a serious concern.
Unfortunately, the hard times look set to continue with yesterday’s announcement from the UK’s chief medical officer, Professor Chris Witty, that social-distancing measures are likely to be in place until the end of the year.
Several sectors have already been devastated by lockdown, the arts among them, and those working as part of the gig economy are now among the most vulnerable as their industry has effectively disappeared over night.
Upon this rock
Unlike the 2008 financial crisis, the UK housing market does not look set to crash, thanks largely to the governmental support mortgage holders have received. Renters and their landlords, on the other hand, now face a difficult period of reduced or zero pay coupled with increased domestic utility usage and therefore higher bills.
While the government has introduced a three-month blanket ban on evictions, renters included, it has offered little in the way of advice or support to landlords other than to foster regular communication with their tenants.
Extreme circumstances call for extreme measures however this does leave many landlords in a financially and logistically precarious position themselves. Legally speaking, agreements between tenants and landlords are still in effect however in the context of the eviction ban, landlords are now unable to enforce agreements.
As the crisis deepens, the likelihood for landlords is that the instance of rent receipt will decline steadily as unemployment and reduced pay take their toll on tenants.
The absence of rental receipts may also result in degraded living conditions for tenants as landlords are financially unable to maintain properties without the lifeblood of rent payments. Not to mention the logistical challenges of arranging said maintenance visits in the first place.
Adapt to survive
Nevertheless, there are measures that landlords can take, not only to survive the crisis but also to futureproof their portfolios to ensure they are prepared should a similar event occur in the future which, according to global health expert and senior TED fellow Alanna Sheikh, seems extremely likely.
“This is not the last outbreak we’re gonna see. There’s gonna be more outbreaks and there’s gonna be more epidemics. That’s not a maybe, that’s a given… Human choices are driving us into a position where we’re gonna see more outbreaks.”
-Alanna Sheikh
Since rent income will be significantly impacted during lockdown, it falls to property owners and managers to make every penny coming in go as far as possible. Efficiency, then, becomes the name of the game, reducing outgoing to match income by improving how funds are spent.
Procurement
Utility costs will form a huge part of those outgoings and ensuring that you are procuring your utilities from the best possible supplier for your needs will help make sure you’re not overspending at the source.
Intelligent Metering
The installation of AMR (automatic meter reading) technology across your sites will secure several major advantages over an analogue system. It will guarantee consistent data collection even when checks are not feasible and, crucially, remove the need for physical visits altogether thereby not breaching social distancing measures and safeguarding the health of both staff and residents.
Building Management Systems
Building Management Systems are becoming increasingly commonplace in medium to large enterprises, quite simply their advantages are myriad and undeniable. A BMS will grant unparalleled control over individual elements of internal environmental control as well as at the macro-scale, able to be adapted to multi-site portfolios as well as individual structures.
Systems like these can be used to perform remote diagnostics and limited maintenance, monitor air quality and temperature levels to improve inhabitant’s mood and health.
The added boon of all of these is that any improvement to efficiency in utilities use will also have a knock-on effect for your tenants, meaning they will be in a more tenable position to maintain rent payments.
Monarch Partnership are energy and utility experts, with over 30 years of procurement, auditing, asset management, data collection and cost management. We manage ongoing water, waste disposal, energy and telecoms contracts for our clients, with our market analysts constantly working to secure the best deals from suppliers.
Find out how we can help you become futureproof at our website.
