Four weeks into the UK’s coronavirus lockdown, speculation around the nature of the exit and the state of the economy on “the other side” is rife. Law firm JMW Solicitors ran a series of virtual roundtables with industry experts to find out how things are looking for the property and construction industry, and whether there are opportunities to be found amidst the fray.
Thomas Pearson, Real Estate Partner at JMW, summarised sentiment, calling on the industry to help and support each other, avoid adopting a mercenary approach and take a long-term view – particularly when it comes to dealing with contractors, who have been hit hard by the measures to tackle Covid-19.
While those who contributed to the conversation were realistic about the challenges ahead, they were also positive about the sector’s ability to weather the storm ahead.
He said: “We’re navigating choppy waters, but deals are still being done, new transactions being agreed and developers remain committed to moving projects forward – the crisis has caused distress to a lot of firms – and employees, with many now furloughed – but the general sentiment is that the fundamentals are still there, along with appetite. It’s important that the industry support each other during these difficult times, because it will surely be remembered when times are good.
“We know that some sectors will be hit harder than others, such as retail, while housing will likely continue to stack up given the supply and demand gap and underinvestment in social housing. There has been some speculation that the vast numbers of people working from home will see office requirements slashed, however working from home isn’t for everyone and the feeling is that many of us will be pleased to return once again to an office environment.”
While planning consultancies traverse the temporary changes to the system, and other professionals relocate laptops to kitchen tables, the outlook has been particularly dire for contractors, which have found themselves in an unenviable position. Although many sites closed their gates some time ago, those who have found a safe way to operate are struggling to get enough boots on the ground, and sourcing materials and equipment has grown more difficult.
Thomas said: “Contractors are working hard to keep projects on track, but things are becoming progressively more challenging – even if social distancing can be observed on site. Some schemes are even being tweaked mid-construction to incorporate materials that are available.”
Given the scale of the challenges for a very sociable industry that needs to be out and about on the ground, the law firm was also keen to highlight the determination to find new methods to navigate social distancing guidelines, such as virtual site inspections and planning pre-apps which some local authorities are carrying out via video conference.
“It’s difficult get valuations and surveys done, traditional planning committees can’t take place, and some elements of the funding market have paused, lenders inundated with applications for Business Interruption Loans – yet every day we hear of new solutions to keep the wheels turning”, Thomas said.
“While there’s no denying the challenge ahead – and the need to get Britain back to work as quickly as possible – there are a lot of people seeing benefit in these new, more streamlined ways of working and getting things done.”
While no amount of optimism will prevent the difficult conversations that will take place over the coming weeks and months, the industry’s determination to find new solutions, keep conversations going and find a way to move forward stands it in good stead to face the post-coronavirus future, whatever it holds.
