Yesterday’s momentous decision by Chancellor Rishi Sunak to extend the government’s furlough initiative for a further four months will help the thousands of estate agencies in the UK which have many of their staff currently in the scheme.
This means that a quarter of the workforce, or 7.5 million people, will continue to be covered by the scheme until the end of October, at a cost of £56 billion to the exchequer.
It also means estate agency bosses will now have much longer to plan the re-opening of their businesses rather than having to rush their preparations as the June 31st deadline loomed.
Now, staff can be returned to branches in stages as agencies test the water to see if there is demand for their services, and whether their former branch turnovers can be banked once again.
We asked some of the industry’s best known agents and commentators what the announcement means for the industry and their businesses.
Jeremy Leaf, Jeremy Leaf and Co
“I was pleased to hear of the furlough extension as it removes lingering uncertainty regarding its viability particularly after receiving mixed messages from government over the past few days,” he says.
“We will have to withhold judgment until we see the extent of the transitional arrangements for staff who could be transferred perhaps to part time duties initially in anticipation of resuming a full time role soon after.
“We originally furloughed about 75% of staff in our offices but brought some back to deal with lettings and management enquiries which have increased considerably over the last few weeks.
“If we are able to open safely by say, the beginning of June at the latest then we do intend to bring more staff back to work but on a rotational basis to reduce public transport journeys and office interaction.”
Steve Wayne, Benjamin Stevens
“I think all the focus on the furlough scheme is less important than thinking about whether my business can open and if there is enough demand to support all my staff coming back to work full-time,” he says.
“Everyone is going to have to be cautious – there may be a very busy first few weeks after the lockdown but after that I think reality will set in – remember I need £60-£70,000 a month turnover per branch to support my current levels of staff.
“I think everyone’s going to have to clever about reinstating staff – we’re bringing back one lettings and one sales person in each of our two branches next month and taking it from there. The furlough extension means we won’t have to rush that plan.”
Iain McKenzie, CEO of The Guild of Property Professionals
“The furlough scheme extension alleviates some of the pressure on businesses to pay staff costs as they start to go through the process of re-opening their revenue streams”, he says.
“The recommendation should be that staff are un-furloughed in line with sector activity and office income generation.
“The extension provides estate and lettings agents with the opportunity to increase staffing profiles to previous levels based on customer activity and income generation, it will also allow to retain great staff.”
Mike Day, Integra Property Services
“Extending the furlough scheme appears at first to be a good thing as it could help estate agencies rebuild pipelines and when, in the third quarter, cashflow issues are likely to bite hardest,” says Mike.
“Of course, if staff are furloughed they can’t work so the possibility of a phased approach involving part furloughed, part time working may, if managed well, be a lifeline.
“But I feel that, while the Government does not want a stampede to the job centre, the spectre of greater unemployment in the industry still hangs like the Sword of Damocles over many.
“The ability to get back to a more normal business operation and to try and secure transactions quickly will be the best way to save businesses and employees.”
Nick Leeming, Chairman of Jackson-Stops
“It is promising to see that the Government has attempted to safeguard against the cliff edge many industry bodies have warned against by tapering off financial support from August,” he says.
“This may coincide with greater activity in the housing market as pent up demand from buyers pushes through a flurry of transactions in Q3 this year.
“The option to bring back some members of staff part-time may also be useful until we are in these busier months.”
Neil Fox, HouseFox
“We have furloughed a couple of staff but we were are planning to have everyone back by early to mid June, and still intend to do that, unless the lockdown dramatically changes again.
“That’s based on the expectation that the rules on viewings will have changed by then, albeit with certain guidelines to be adhered to when doing them.
“With regard to the furlough extension, I think businesses will suffer from that loss of personal contact, and staff who have been furloughed for seven months could quite easily lose their working momentum and struggle to pick up.”
Dominic Agace, chief executive of Winkworth
“This is a welcome move. It buys employers important time to ensure they make the right decisions for their employees and for the future of their businesses, to avoid exacerbating any negative effects of the lockdown.
“The extension makes perfect sense for estate agents, allowing a phased return to work and for momentum to return to the sales market. This could save many jobs which may have been lost without this continued support from the Government.”