From a pub with no beer to beer with no pubs: David Alexander business comment
This evening, Edinburgh’s Princes Street and Glasgow’s George Square are likely to be deathly quiet, their respective organised Hogmanay celebrations having been cancelled as a result of the pandemic. All around both locations the normally buzzing bars, restaurants and hotels will be closed.
Even in the home, many more people than in previous years will pass midnight in bed with a glass of champagne in one hand and a book (or the television remote control) in the other – if they aren’t already asleep by then.
Despite the restrictions on gatherings, a few hardy souls may still try to venture into town to see in the Bells in the traditional manner (The Tron in Edinburgh and Tolbooth Steeple in Glasgow were the popular gathering places before Hogmanay became commercialised). If so they will be able to do so, for once, without needing an expensive ticket or being bossed about by someone in a hi-viz yellow vest. Every cloud, as the saying goes, has a silver lining.
Those who do make the effort are likely to be young, most of whom, unlike older generations, will survive a Covid-19 infection virtually unharmed. But in economic terms they are fast becoming the most seriously debilitated by this pandemic.
While it’s fairly common knowledge that employment in the hospitality and entertainment industries is dominated by young people, I have a particular insight from the perspective of their accommodation requirements. A substantial minority of the rental properties managed by our company are occupied by people working in these sectors, which has probably suffered most as a result of the various lockdowns imposed since March. Bars, restaurants, hotels, theatres, cinemas, gyms and health centres, football and rugby clubs and heritage attractions have all had to close or had their clientele severely restricted in numbers.
Furlough payments – now extended to the end of April – have, of course, helped but these do not cover all salary costs and there are still other outgoings but no income. So when various hospitality bosses tell you that they are “on the brink”, they are not bluffing.
Therefore with real job losses and more in the pipeline, hospitality workers who rent their homes are prominent among those who’ve had trouble meeting their monthly commitments and have needed to ask their landlords for “help”. For their part, most landlords have responded positively, offering reduced or deferred rental payments to try and see their tenants through. Some have even taken pity and given their tenant a complete rental “holiday” lasting several months – somewhat at odds with the politically-motivated stereotype of the average landlord being grasping and greedy.
However these rental concessions are, of course, a financial drain on landlords; they cannot last forever and, sadly, some tenants who lose their jobs will lose their homes as well.
Paradoxically, landlords may not have too much difficulty filling vacant properties because the aftermath of the pandemic is likely to result in an increase in demand for rented property. This will not be just down to unemployment or the fear of unemployment. Even in sectors where jobs are relatively secure, upward mobility will be a key factor in bagging the best-paid positions and, of course, renting rather than owning one’s home facilitates this.
In Scotland a tenant can normally vacate a rented property by giving just one month’s notice; fixed-term leases are still the norm in England but as Westminster has tended to play catch-up with Holyrood on security of tenure in the private sector, it will not surprise me if the Scottish system is eventually adopted south of the Border as well.
Another likely occurrence, post-pandemic, is tighter restrictions on mortgages. Until recently the biggest problem facing first-time buyers has been raising a sufficient deposit after lenders got their fingers burnt with 125 per cent mortgages and other daft schemes which were exposed by the crash of 2008. Lenders will continue to demand substantial deposits but a mortgage applicant’s prospect of job security may take on even greater importance. This is almost certain to mean longer periods of renting for at least some would-be first-time buyers.
But with 2021 almost on us let’s not end on too gloomy a note. The hope must be that the immediate post-pandemic era will see an unprecedented upsurge in bookings within all sectors of hospitality from a public desperate to return to normal social activity. Let’s hope so. Young people whose jobs are under threat really have shown remarkable stoicism over the past ten months; they deserve a break.
- David Alexander is managing director of DJ AlexanderA message from the Editor:
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