By Adam Coffer
As the editor, Samantha McClary, hit on last week, there is a “clear misunderstanding of the role of the real estate sector” from government. She was putting it mildly. In my experience over the past two years, it is less a misunderstanding and more a willingness to buy into the age-old demonisation of property owners.
That demonisation has never been more manifest – and perhaps more damaging – than throughout the pandemic. Government’s intention of pitching itself as chief protector under the assumption that landlords and tenants will automatically be adversarial was good: to protect jobs. But it was as unhelpful as it was misplaced. By doubling down the narrative that every tenant needs protecting from every landlord, it missed the opportunity to embrace and empower collaboration taking place.
Unfortunately, such tone deafness from government, MPs, spads and the civil service shows no signs of abating.
Mind the optics
The sentiment reflects centuries-old tropes and misconceptions; it positions “landlords” as cigar-chomping, pin-striped barons who whip their serfs for amusement and gain. But that could not be further from the truth. Property owners are every man and woman on the street, via our private investors, charities, local authorities, pension funds and so on.
Property Owners Forum was set up pretty much by accident – a rant here or there to try to articulate to government that the property industry is not simply huge REITs and institutions. It struck a chord, and now represents more than 200 small and independent “landlords” (a word we have intentionally tried to avoid using owing to stereotypical assumptions it elicits). Members range from baggage handlers exposed via their pension schemes to landed estates, from retired doctors to multi-millionaires.
We have, in fairness, been welcomed by and encouraged to engage with government. And many of the individuals involved are decent, bright and sympathetic. But I have also come across utter contempt, ignorance and vitriol of disturbing levels from all ranks of politics.
I am reminded of a meeting early in the pandemic, shortly before the reading of the Insolvency Bill. I requested a simple measure to ensure that any large organisation benefiting from the moratorium on rent collection commit to not taking huge executive bonuses until rent was being paid or waived.
A senior civil servant retorted: “We can’t very well be seen to be helping rich landlords – the optics wouldn’t play at all well.” Optics. Really? I cited one POF member: a pensioner in a northern town, whose only asset was the former fish and chip shop he had run and managed to buy the freehold for, and which was now let to corporate giant Subway. Subway had been collecting rent from franchisees (intended for their landlord) but was refusing to pass this on to landlords and the man’s bank was now threatening.
Fast-forward two years – just this week it emerged that Boots’ owner (part of the Walgreen empire) had extracted more than £2bn of dividends from its UK holding companies, despite withholding millions in rent from property owners: the latest of a plethora of similar examples. But let’s be glad that government’s “optics” were OK.
Empathy as key
It was also no surprise that when the Code of Conduct on Commercial leases was published last month, signatories Paul Scully and Neil O’Brien introduced it with patently anti-landlord rhetoric.
I wear several hats – not just to protect my increasingly follicly challenged head – I am a landlord, a tenant/operator, the son of a man who effectively created leisure property agency/advisory and am even a former reporter of this parish. So empathy always seemed key. Our argument has remained consistent: deter aggressive landlord behaviour, but also unscrupulous tenant behaviour (typically private equity/billionaire-backed multiples) and encourage collaboration.
We are very proud of our relationship with our tenants, who appreciated our behaviour as much as we appreciated theirs, in reaching solutions that kept all of us healthy enough to come back fighting stronger. I sat on many discussions alongside tenants, all of us demonstrating to government that we are not opponents.
But the greatest disappointment from our experience remains how government failed to recognise and seize the opportunity to enable collaboration. Instead, it chose a return to the outdated assumption that “them and us” prevails. The unintended consequences of doubling down on the “adversarial” narrative was to threaten progress.
But that adversarial tone does not reign in reality; relationships were cemented, and most landlords and tenants continue to recognise their symbiosis. They need to, as tenants continue to face challenges that directly affect their landlords. There is a renewed empathy, owing to market dynamics and commercial insight – and, in my opinion, in spite of, not thanks to, any government measures.
The broken record, bemoaning a lack of empathy or lack of united voice from our industry, is becoming tiring. So precisely how we move the needle – or, more importantly, how we demonstrated that we have – is the next challenge.
Adam Coffer is chairman of the Property Owners Forum