Manchester 3

Understanding and flexibility are key to navigating a crisis for this agency

Building a full understanding of how the coronavirus (COVID-19) pandemic is affecting tenants, and the knock-on effect to landlords, is the key to navigating these uncertain times, says the director of this agency.

Suzy Lycett

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This article was originally published on 4 May 2020. Although we endeavour to keep our coronavirus (COVID-19) content as up to date as possible, the situation is rapidly changing, so please ensure you refer to gov.uk for the latest advice and information.

“We've got a watch list of tenants where we've preemptively agreed payment plans depending on each individual situation,” says Samuel Fitz-Hugh, UK Director at Settio. “This makes sure all tenants are reassured, know what's going on, and know their responsibilities during the pandemic - and we can make all landlords aware well in advance of any issues actually arising.”

With an office in Singapore, Settio’s landlords investing in the UK are largely spread throughout Singapore, Hong Kong, Malaysia and some in China. “Our niche is high-end, new build, city-centre apartments, mainly with professional and wealthy overseas investors as opposed to smaller accidental landlords or one-off investors in the UK,” says Fitz-Hugh.

This global customer base is proving advantageous as uncertainty persists during the pandemic. “Although we're having some issues with tenants that are struggling to pay their rent, most of our landlords are very understanding,” says Fitz-Hugh.

“Most have been through the SARS epidemic, so they’re understanding of the situation, and many are relatively wealthy – if there are some delays to their rental income, they don’t mind too much, as long as communication stays consistent and fair payment plans are set up to help retain their tenants. Where some local landlords are more exposed, we’re seeing examples of cash flows becoming tight so we’re helping them secure mortgage holidays.’’

Settio are using all this knowledge to strategise on how to keep tenants for longer and therefore keep their landlords happy. “For any landlord, the key is just to keep properties occupied. We’re aiming to batten down the hatches by managing our existing portfolio really, really well, and prioritising renewals,” says Fitz-Hugh.

To avoid ending up with empty stock and a “high supply, low demand market” when the emergency measures are lifted and moves start again in earnest, Fitz-Hugh says that Settio will prioritise flexibility to ensure more renewals on fixed term contracts rather than rolling to periodic tenancies. “Whether that means accepting reduced rents or shorter notice periods in some cases to secure our claim for a fixed term renewal through this difficult period, that's our main priority.”

Fitz-Hugh hopes that this proactivity to ensure continuity in the long-term for their landlords will lead to future developers having confidence in how Settio will manage their properties. “It's a great way for us to benefit by showing developers - our target market - how we coped in the situation, with stats on our hopefully very low arrears rates. It’ll demonstrate further that we're the right people to work with. You only see who's the best in any market in a crisis situation like this.”

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