Estate agency firms will hire fewer junior staff following another increase in the minimum wage announced just before yesterday’s Budget, leading recruiters have warned.

Josh Rayner, Founder of Rayner Personnel (main picture), told The Neg property businesses will go for more experienced staff if career starters cost more.

The Government announced the minimum wage would rise 4.1% from April for over 21s to £12.71 an hour.

And for staff aged between18-20 will see an 8.5% rise to £10.85 an hour.

For 16 to 17-year-olds, and those on apprenticeships, there is a 6% increase, bringing the minimum wage up to £8 an hour.

Estate agencies have previously been named and shamed by HMRC for failing to pay the minimum wage.

Under pressure

“Staffing models are under more pressure than ever. This year’s rise in the minimum wage followed by another planned increase in April comes at the same time businesses are being hit by higher National Insurance contributions,” Rayner says.

For many agencies already operating on tight margins, the impact is real and immediate.”

“For many agencies already operating on tight margins, the impact is real and immediate.”

“If a junior now costs nearly what an experienced negotiator did a few years ago, you can see where leaders will lean,” he warns.

Agencies will prioritise the roles that AI can’t replace, Rayner of Rayner Personnel, who is also CEO at The Recruitment Franchise Group, says.

He also predicts the self-employed estate agency model which already sits at around 6% of the UK market, will rise to 20%+ over the next few years.

This is a big concern, not just in estate agency, as I can see youth employment overall taking a hit.”

And Anthony Hesse, MD at Property Personnel, tells The Neg: “With regards to yesterday’s announced rises in minimum wage I am certain this will only make estate agents more cautious about hiring, especially when combined with the increased rises in employer NICs that have already kicked in.

“Estate agents have historically relied heavily on employing entry-level workers, especially young people, but since the rises in minimum wage and employer NICs, there have been significantly fewer job opportunities at this level, with employers favouring more experienced workers,” he says.

“Not only can they pay them a similar basic salary, but they know they will be employing someone who can ‘hit the ground running’ with comparably less investment in time and training required.”

And he warns: “This is a big concern, not just in estate agency, as I can see youth employment overall taking a hit.”

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