As we approach the June quarter day, it is not only landlords who will be keeping a close eye on rent collection. For lenders rent collection is also very important.
So far we have largely seen that lenders have been supportive of landlords in relation to unpaid rent for the March quarter day – in some cases lenders have agreed to variations and waivers in financing arrangements.
With rent collection this month likely to be far worse than the March quarter day and with no certainty over when social distancing restrictions will be fully eased, the next few months are going to be challenging for lenders. Some lenders could start to take a tougher stance with landlords. For properties where a lender does not have valuable additional security (e.g. a parent company guarantee), we could later this year see a number of lenders considering whether to appoint a receiver under the Law of Property Act 1925 to sell the property.
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