The Chancellor has extended the current Furlough scheme until the end of October but now has a huge challenge to get this right, say tax and advisory firm Blick Rothenberg.

Reaction from the estate agency world matched the sentiment.

Heather Self a partner at Blick Rothenberg said: “He needs to achieve a “Goldilocks” effect – not too hot, and not too cold.

“If he provides too much it will be very expensive and may discourage firms from reopening. If he provides too little thousands of people could lose their jobs.”

She added: “It is going to be a turbulent time for the labour market in the Autumn.

“Some sectors, such as the hospitality and tourism sector, are likely to see significant redundancies, while others such as construction and financial services will be relieved to see a gradual winding-down of support.”

From the announcement yesterday we now know that:

Support will be continued to the end of July in full, with employers required to contribute after that date.

Part time working will be permitted, but only for some employees.

The same level of overall support – 80% of wages up to a maximum of £2500 a month – will be maintained.

Self said: ” As the furlough scheme is reduced the Government needs to incentivise business and come up with creative ideas about how business can keep going and retain staff.”

“The Chancellor could not go on paying out billions of pounds indefinitely, and everyone understands that, but there needs to be much more joined up thinking between Government and business.”

So far, some 7.5m employees have been furloughed, at a cost approaching £10bn.

The expected costs to the end of July are likely to be around £50bn, and the extension at a reduced level to the end of October perhaps costing a further £20bn.

These are very significant sums, amounting to around 10% of total Government receipts.

Self added:

“Enabling part time work is welcome, as it will permit a gradual return to work.

“But the Chancellor said this would only be available to businesses “currently using” the scheme – it is not clear what the cut-off date will be for businesses still considering whether they need to furlough employees”

“Additional support beyond the furlough scheme will be needed for a long time – whether loans such as the CBILS scheme, or grants, or incentives such as an increase in the Employment Allowance to encourage employers to maintain their staff levels, or even take on new employees.”

Ed Mead of Viewber welcomed the news:

“It’s good to hear it’s being extended and clearly couldn’t carry on in exactly the same form or UK PLC would go bust.

“It makes sense to reduce what Gov’t pays as it means Employers can continue to get help whilst allowing employees to contribute to the bottom line.

“This may allow some to hold off potentially laying off some workers whilst they build pipelines.”

Simon Bradury of Thomas Morris took a cautious approach:

” We’ve long learnt that the mantra ‘the Devil’s in the detail ‘ is appropriate for every single policy suggestion made by government in this challenging situation.

“I understand that the Chancellor will be providing this detail by the end of the month, which will be waited for in great anticipation.

“The phrase ‘…combined efforts of government and employers…’ is key!

“That said, if there is additional flexibility to bring back furloughed colleagues in a part time capacity, I would generally welcome the initiative as one of a range of options to get us all back to work.”

Dominic Agace, chief executive of Winkworth estate agents, with a network of 100 offices nationwide, said:

“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.”

Nick Leeming, Chairman of Jackson-Stops, also welcomed the news :

“We welcome the Chancellor’s announcement on extending the furlough scheme until the end of October.

“This will undoubtedly come as a relief to many agents across the country as it offers a big help to businesses trying to rebuild their revenue pipelines.

“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.

“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.

“Above all else, today’s announcement helps businesses maintain the infrastructure that they need to resume normal trading.

“Meanwhile, agents across England await confirmation as to when they can resume market appraisals and viewings.”