In the past two weeks the prime minister Boris Johnson has set out his roadmap to exit lockdown, while the chancellor Rishi Sunak has put forward his first post Covid-19 recovery budget. Both senior ministers have made clear that the government’s number one priority for 2021 is to keep a lid on unemployment whilst rebuilding and reviving the country’s economy.
Probably the greatest relief for most in estate agency was the announcement of the stamp duty holiday extension. This, along with the ability for firms to deduct investment costs from tax bills, reducing taxable profits by 130% and for new homes, the new mortgage guarantee system, gave further support to the property sector. One take home for me was the increase in incentives for firms to take on apprentices; could this be an enabler to attract and bring new talent into estate agency?
Arguably the chancellor’s biggest announcement was the furlough scheme’s extension to the end of September. Whilst there’s little doubt that this will stifle unemployment and underpin the economy during its restart, is there cause for furlough within estate agency today?
We’ve discussed previously how the housing sector is now viewed as the bellwether for the UK’s economy by government and investors alike. Investors and institutions certainly are demonstrating their confidence, nothing demonstrating this more than hard cash. Within the past two weeks alone:
- Skipton Building Society backed Connells acquired Derbyshire’s respected agency group Hall & Benson, following hot on the heels of the High Court’s approval of Connells £253m takeover of Countrywide
- eProp, the company behind The Guild and Fine & Country and in majority ownership of Toscafund Asset Management, completed their multimillion-pound acquisitions of proptech firms The Property Jungle and Starberry
- Bowmark Capital backed Leaders Romans Group (LRG) confirmed their acquisition of 13 branch Gibbs Gillespie following LRG’s takeover of five-office Hill & Clark in February
- Linley & Simpson, part of Investec and LDC backed Lomond Capital, acquired York based student lets specialists Sinclair Properties, marking Linley & Simpsons eight acquisition since the outbreak of Covid-19 in March last year
Taking a look at the jobs market, 2,173 new estate agency roles were added to Reed.co.uk, one of the UK’s leading job boards in February. For each estate agency job advertised during that month Reed.co.uk received 9.2 applications, sounds good right? Wrong, usually 20% of applications meet the clients experience criteria, 80% are inappropriate for interview. So that’s just 1.8 potential interviews for each job.
Estate agency is in rude, buoyant health. Investment levels are at a four-decade high, transactions and revenues are strong and in the opinion of most, will remain so for the foreseeable future. There is a healthy demand in the jobs market which isn’t being matched with a sufficient supply of experienced talent. In a sector doing so well, where’s the need for furlough?
Josh Rayner is founder and head of Rayner Personnel.
I think furlough has allowed flexibility where employees need it but I think we as a sector should think hard before using it now. There is a huge pool of non industry talent and I would argue that amongst the 80% of unsuitable applicants – training and development could create a new brand of estate agent with adaptable skillsets. I know many agents who only employ agents with no previous experience and at Able Agent we are inundated with people taking our courses to get into the industry.
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Yes – In the Commercial Space. End.
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Yes, with a number of single parents working for us, Furlough has been a godsend. I appreciate the schools are slowly opening up again and these staff are now filtering back into the normal hours but we don’t know what is around the corner.
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In certain circumstances yes.What worries me about the whole support scheme is that clearly the Gov support package has been abused by some agencies in allowing revenues to dip significantly but profits to remain very high. Perversely assuming most PIE readers are UK tax payers we have just inadvertently helped with these acquisitions.Not so much as a thank you !!
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Residential – NO! If you are, then there are better agencies out there
Commercial – Yes
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