So what does a hazy view of the new world look like when the first particles of dust start to settle?  Phase 2 of the governments Covid-19 response is starting to unfurl, and with it certain parts of our daily life and economy will begin to grind forward once more.

This is positive and welcome news for many of us.  But in starting to call time on the current national freeze frame, some questions will start to be answered, and not all answers will be welcome.

  • Businesses will be weaned off the furlough programme – which will be able to afford to return to normal staffing costs?
  • Houses and flats will be traded again – what will a return to transactional evidence show in terms of post outbreak pricing?
  • Next steps will include reopening certain retail and hospitality industries – will businesses be viable in a “new normal” of reductions in capacities and consumer confidence?

The answer to these questions, and many more, will start to reveal as we go.

Will the real estate lending sector follow a parallel path in terms of an increase in action on challenged assets?

Good practice, public policy, legislative action and economic reality have all lead to a virtual moratorium in action from lenders.  As life starts to move on, it will be increasingly possible to take a reasoned and evidenced approach as to how individual assets will fare going forward.   The survivors which needed support riding out the storm will be separated from those which have been dealt a more fundamental blow.  Telling the difference between the two is the first step in understanding what would be the appropriate action to take.

At Montagu Evans, we’ve pulled together a team of experts across sectors who can help lenders and IPs set a course for recovery, read more here >