We are going into LOCKDOWN!
18 months ago Scotland went into lockdown, as the extent of the COVID-19 pandemic became clearer. The level of uncertainty about our lives, our economy and our way of life was unprecedented.
18 months later, we can have a look at the event as they unfolded, and learn from them.
The threats
As a letting agency we identified some potential critical problems, although we had no idea on how difficult or easy these challenges were going to be:
Keeping properties well maintained and inspected
Tenants in arrears as the economy collapsed
Properties being vacated and inability to let these properties again
Financial viability of the business itself
We reduced our team to five people, including our accounting team. The rest of the team was sent on furlough (a word that many people had never used before!).
Payment holidays and arrears
The legislation around private residential tenancies changed, with the spirit of protecting tenants against eviction. In broad terms, the criteria to evict tenants was made more restrictive (to the landlord) and the notice periods were increased to up to six months.
Over the following weeks we had 17 cases of tenants approaching us requesting a payment holiday of their rent. The number was much lower that we initially anticipated, nevertheless we needed to react to this new kind of event.
As a response to this, we designed a online and over the phone process by which we would allow tenants to demonstrate the severity of their financial circumstances to the point that a payment holiday request could be put forward to the landlord. Out of these 17 cases, only 8 submitted the required information. The other 9 requests were simply withdrawn. Out of the 8 cases that made a request, a combination of temporary rent holiday or rent reduction was granted by the landlord. By September 2020, all cases but two were back in full payment with any arrears paid back. What we felt was one of the biggest threats, never materialised to the extent that we expected. Both parties, landlords and tenants had acted responsibly
Inspecting properties
When it came to property maintenance the biggest challenge that we faced was the inability to visit the properties. At the peak of the lockdown not even our team were allowed out. As measures were eased, tenants were extremely reluctant to let anybody into their property. As an alternative (not ideal, but better than nothing) video inspections carried our by the tenants became the normal practice, until the second half of 2021, when a full on-site inspection regime (whilst maintaining social distancing rules and under the full consent of the tenants) was re-started. Once again, landlords and tenants had acted responsibly, showing a great degree of flexibility.
Portfolio shrinking
The biggest threat that did materialise was the speed at which our managed portfolio was vacated. By the end of June 2020 16% of our managed tenancies had been terminated by the tenants, as they were moving away from Aberdeen (mainly students) or did not required their Monday to Friday accommodation (commuters that now were working from home remotely).
At the time we had to pause and come up with new ideas about how to let this ever increasing number of empty properties as soon as the lockdown measures were eased. We soon implemented:
360 Interactive Virtual Tours (Matterport)
High quality Walk-through videos with titles and background music
‘Open day’ webinars to show properties to multiple tenants simultaneously (this became extremely useful with HMO properties).
The results were felt immediately. As soon as tenants were allowed to go back on the market (virtual viewings were recommended), the flow of new applications came like an avalanche. In July we let 47 properties, and in August we let another 47. To put this in context, in January and February 2020 we had let 12 and 18 properties respectively.
During those months of pause a review of our portfolio was carried out. Landlords were encouraged to dramatically improve the standard and presentation of their properties and now they could see that their investment was paying off.
The last quarter of 2020 and the first half of 2021 were fairly stable, but summer 2021 showed a considerable increase on the interest of high end properties in Aberdeen. This was excellent news since this is the core of our operation. The West End, Cults, Bieldside and Milltimber have become places where rental properties were snatched in days.
After the storm
There is no doubt that COVID-19 was one the biggest challenge for many in their lifetime. Physical and mental health issues, death, financial difficulty and adaptation to a new way fo life. If could go back in time and avoid it, humanity would have done so. That is not an option. Leaving the personal losses at many levels, we feel that the COVID-19 pandemic and lockdown was an incredible opportunity to learn an grow. As a business we learnt:
The importance of correct procedures in place, that can be swiftly changed and adapted to new circumstances.
The importance of being able to think outside the box and come with new, simple but effective ideas that if carried out consistently can produce a massive change. Our new way of marketing properties is proof of this.
The importance of good communication with our customers. Despite any differences, and regardless of the interest collisions that at time happened, the best of everybody came out when it was needed.
And, as Director of Martin & Co Aberdeen, I learnt, by going back on my steps and discovering some serious mistakes that I had made in the past, that having a great team, fully trained, fully motivated and willing to go the extra mile for our customers, is priceless.
The worst is behind us, we hope, but regardless of that, we have come out of this stronger. Thanks to all parties for their support for the last 18 moths.