NEWS RELEASE:
COLLECTION RATES OF RENT AND SERVICE CHARGE PLUMMET FOR UK COMMERCIAL AND RESIDENTIAL PROPERTY
Research by Remit Consulting into the collection of rents by leading property managers at the start of the second quarter of the year has revealed that the collection of rent, on the due date, from residential and commercial tenants, was down by as much as 50% compared to the same period in 2019.
The European real estate management consultancy has been able to compare current figures with those of its 2019 “REMark Report”, which included an analysis of rent and service charge collection rates for the same period last year.
Since the beginning of April the firm has surveyed six of the UK’s largest property management firms regarding the collection rates of rents and service charges payable by commercial and residential tenants. Between them, these firms are responsible for nearly 78,700 separate leases on over 18,350 commercial and residential properties across the UK.
The findings illustrate the extent to which the COVID-19 pandemic seems to be impacting the property markets. In 2019 the overall average figure for the collection of rents on the due date was 79%. In April 2020 this figure is 48%.
Overall service charge collection rates (due date) are even lower, falling from 73% in 2019 to 35% in 2020.
Rent and Service Charge Collection rates:
“While property managers are working hard to mitigate the impact of the pandemic, and further research is needed in coming days to get a clear picture on how agreed rent and service charge ‘holidays’ are impacting collection rates, these figures are likely to make uncomfortable reading for landlords, asset managers and investors,” said Steph Yates, a senior consultant at Remit Consulting.
“In the forthcoming weeks, we will continue to consult with the members of our Property Management Forum regarding the state of the markets. The data we collect will help the forum’s members to identify the possible consequences for the institutions and property investors they represent.”
Remit Consulting is planning to expand the survey over the coming weeks, to include one of the major Landlord associations (which is currently consulting its members regarding their participation).
If you would like to contribute to this research or receive further updates, please email Steph Yates.
Click here to view the Property Week article, and here to view the Financial Times article that relates to this release!