 Hi, everyone. Thanks for taking the time to listen to me today. I'm your head of data analytics at PayProp. PayProp is a transactional platform used mainly by residential rental agents. And because of our main business, we are able to co-load data and use that to spot trends in the rental market. We publish a quarterly rental index that you can subscribe to, or you can head over to our virtual booth to download the latest version. Much of what I will be chatting to you about today can also be found in the rental index, along with many other interesting topics. I hope that you'll be educated and informed during the talk and walk away with a good idea of the current state of the rental market, six months into lockdown, what it means for the players in this market and what it might look like in the near future. First, let's look at what happened to rental growth patterns in the first six months of this year. So when we measure growth, we measure it year on year. In other words, the growth percentage for March 2020 measures the increase in rent between March 2019 and March 2020. So in this graph, we can clearly see the effect of lockdown on rental growth rates, which is blue as well as on inflation, which is in red. Rental growth has been trending below inflation for some time, at least the last two years, but you can clearly see that both of these dipped off to March when lockdown began. So if inflation is just a way to measure an increase in overall price, why did it all of a sudden increase at a much lower pace as we can see in this graph? Well, demand is a big driver of price increases. And in the first months of lockdown, consumers were only able to buy essentials and many consumers also suffered a loss of income, whether that was partially or fully. So both of these factors lowered demand for goods and products in general, and that is partially why we see such a low inflation rates for the second quarter of the year, April to June. Rental growth is effectively the inflation of rental prices, right? So it should not be surprising that the rate at which rent increases also slow during this time. Usually rent increases for many reasons. Tenants move to nicer places or bigger places or places closer to work that are more expensive. Much of this happens because tenants can afford to move, but with many experiencing a loss of income, they now can't afford these higher rental prices and this decrease in demand causes the low rental growth that we see in the graph. Something also happened on the supply side during lockdown. So because of the travel restrictions, many landlords had short-term rental properties on Airbnb and other similar sites sitting empty and they decided to move their rental properties back to the long-term rental market. So they essentially flooded the market. Both the lower demand and the higher supply put downward pressure on rental prices, right? This will continue to be the case after lockdown. It will take some time for the economy to recover so we don't expect to see a big rebound anytime soon. So how does this affect rental agents and landlords, you may ask. So if you're a rental agent, your commission is directly linked to the rental price since it's usually a percentage of rent instead of a random amount, right? So that means that your commission income that was already increasing at a level below inflation is now increasing even slower. The fact that your commission is growing slower than inflation also means that in real terms, you're purchasing power is less. So you are essentially becoming a bit poorer. If you're a landlord, you must keep in mind that you probably won't be getting the rental increases that you used to get since affordability is now a more important consideration for tenants than before. And since there's an oversupply of rental properties for tenants to choose from, you have a little less bargaining power. It is worth noting that we are speaking about rental prices and rental growth observed nationally, but not all provinces follow this trend. There are different economic variables that affect rental growth in different provinces and even in different cities within a province. Student housing is one such variable as is economic activities like mining. We usually do a breakdown in the rental index so that you can have, so you can have a look in there for provincial rental growth rates and also the Rears data. If rental growth was one aspect that was negatively affected by lockdown, it should come as no surprise that a Rears was another one. Now, when we talk about a Rears, we talk about two different metrics. We first look at the percentage of tenants who are in a Rears and then we also look at the size of the areas. Both of these give an indication of how tenants paid their rent during lockdown. So let's have a look at this first graph. This shows the percentage of tenants in a Rears from January to August this year. We can see that the number increased significantly from March to May, right? Expected. Many people returned to work again in June so we see that this number dropped slowly down from June to August. The increase in this figure means of course that tenants who were never in a Rears now actually owed rental money, either because they couldn't afford their rent or because they only paid partially. And while we've seen a decrease since May, there are still more tenants in a Rears now than before lockdown. In March, only 19% of tenants were in a Rears and in August, this figure is still closer to 23%. This peaked at 26% in May so we are at least a bit lower than that high point. Looking at the next graph, so when we calculate the average size of a Rears, we look at it relative to the average rent. So if the average Rear size is 50%, it means that on average, a tenant who's in a Rears is half a month's rent behind. When we look at the average Rears percentage over time this year, we can see that this metric, not surprisingly, also increased substantially from March to June and then it's stabilized over the last few months. For June through August, the average Rear size was at 105% so that is just over one month's rent. To put it in perspective, this figure was under 80% in March. If we take both these metrics into consideration, one can actually argue that tenants who had smaller amounts outstanding paid up. That is why the percentage of tenants in a Rears dropped but not the average Rear size. I hope that makes sense. The tenants who are now still in a Rears will most likely struggle a bit more to get their Rears down because remember that if a tenant stopped paying his rent for a few months and is now paying his rent in full again, they will have to fork out extra money to reduce that Rear size and in this economic climate, it might be a bit tricky. So how does this affect rental agents and landlords? You may ask. Rental agents don't earn commission on rent that they haven't collected yet and landlords of course, don't receive any rental income if that tenant didn't pay rent. This means that both rental agents and landlords might experience cash flow problems. We've also seen from paper up stats that the higher the outstanding rental amount, the lower the probability of you collecting that money in full. That means that the quicker you get onto your Rears, the higher the probability of you actually getting that money from your tenants. So you need to have a handle on it from the very beginning and you need to have a plan to manage it. Whether that is taking legal action, sending regular reminders or making a payment arrangement with your tenant that they are actually able to commit to during this time. I think it's clear that as a landlord or a rental agent in this current climate, you must now weigh your options a bit differently. It will be more difficult going forward to find good tenants since the financial implications of this lockdown will affect tenants for a while even after lockdown is totally lifted and this might even be reflected in their credit scores for some time to come. As we mentioned earlier, tenants have more options of properties to rent now as well. So you have a little less bargaining power and you'll have to compete harder for these good tenants. So we've already seen that rental growth and inflation were lower during lockdown and we explained the reasons. We've also seen that the Rears have increased but it looks to be on a slow path to recovery so let's hold thumbs. We've also said that many Airbnb properties have left the short-term rental market since they were standing empty because of the travel ban. Over the medium to long-term, however, we will most likely see at least a partial reversal of this but it will take some time. What are some of the other trends that we can expect to see? Well, with most of the world basically stranded at home for at least some part of the last few months, companies had to adapt and many people had to work from home and will continue to do so even after lockdown. Some people lost their jobs and they simply had to make a plan to earn an income and many people actually started their own businesses during this time. Whatever the case, the working world as we knew it changed and some of these changes are permanent. Where people once wanted to live close to work, this will now in many cases be less of a consideration. This means that they are able to move further out whether that's to the suburbs or even to nearby towns where you get a bit more banged for your buck. Fast internet, the availability of fiber, quiet and secure estate living and the space one office in a home are all factors that renters and buyers for that matter will look for more and more going forward. What do these trends mean for a rental business? What business decisions can you make now now that you know what the market looks like? Three things. First, make sure that the technology you use can help you manage your areas with accurate reporting, reminders, maybe even some other services. Secondly, make sure that you beat your tenants properly. Look at their credit history and their rental history. Check their references, ask for their bank statements, just do a proper meeting of your tenants. Their tenants are not great to have and they are expensive to get rid of. And lastly, make sure that as many repetitive tasks as possible are automated so that you can use your time to grow your business and your bottom line and not spend it doing mindless admin. And that is what I wanted to share with you today. The rental landscape changed a lot over the past six months and counting as did many other industries and many of these changes are here to stay. But if you know what the current situation is and what to expect in the future, you are in a better position to manage your risks more effectively and to take advantage of the situation as best you can. Thank you for listening. If you have any questions, please feel free to ask them now or come chat to me on PayProp's virtual booth during the course of this virtual property show. Thank you.