According to the latest reports from estate and letting agencies around the country, many staff have been furloughed across the property sector and are therefore at risk of losing their livelihoods if the government does not extend the job retention scheme past the end of May.
According to Jon Cooke, Group CEO of epropservices, the parent company of The Guild and Fine & Country, while many estate agencies have made their companies as lean as possible, with the housing market on ‘ice’ and transactions being greatly impacted, many will have to make some tough decisions at the end of May without an extension to the Coronavirus Job Retention Scheme.
Cooke explains: “With a large number of staff furloughed and salary costs greatly reduced, many estate agencies have been able to hunker down and ride out the storm for the short term. However, during this month, many businesses will be looking at their financial situation and making the decision whether they will be able to keep staff on their payroll beyond the end of May. That is unless the government extends the job retention scheme, a decision that would be essential to a large segment of the industry."
He continues that while the government could start to ease constraints on our freedom of movement as we head into summer, it will likely take some time for the economy, and more particularly, the property sector to bounce back.
He says: “Unlike other sectors such as pubs, cafes and restaurants, that should see a relatively fast recovery once restrictions are lifted, the sentiment-driven property sector will take longer to find its feet and will need more support from the government,” says Cooke. “While it seems that the majority of agents’ transaction pipelines remain intact, delays caused by the lockdown will mean that it will take a while before those transactions are completed and the revenue streams begin to flow once again. If restrictions are lifted on 1st June and transactions resume, it will only be late summer that agents will start to see the fruits of their labours.
“There is no doubt that the government has already been crucial in helping estate agents and the economy tread water during the crisis – but if the taps are turned off, the industry and the property market will take a substantial knock. We urge the government to continue taking measures to protect the industry and job roles that will be needed to get people moving again. Moving home has knock-on advantages to other aspects of the economy, so action taken by the government to reignite the property market after restrictions have relaxed will have a positive impact on the financial health of the country as a whole."
Cooke concludes: “While the government has already forecast an estimated cost of £40 billion on the initial three-month scheme, failing to take further measures to protect the industry would be far more financially damaging."