Make hay while the sun shines

The bounce in the market caused by the Stamp Duty holiday on properties up to £500,000 has led to a surge of recruitment opportunities in both estate agency and financial services.

However, one of the biggest challenges we all face is deciding how many people to take on and in what locations when there’s every likelihood that the market will slow down or even grind to a halt once Stamp Duty is reinstated at the beginning of April.

It reminds me all too well of when ex-Chancellor Nigel Lawson changed the rules for Miras back in 1988 after the housing boom through the 1980s. Unmarried couples and friends had been falling over themselves to buy property they could ill afford, taking advantage of rising house prices and the fact they could all claim tax relief.

When it was announced that the tax relief would apply to a single property instead, there was a massive rush to buy in the four months before the changes were implemented – and then a deafening silence from buyers, with interest rates climbing at the same time and borrowers defaulting on the mortgages they could no longer afford.

Within months, the phones had stopped ringing for estate agents and the lights had gone out. By 1991, the country was in the grip of a massive downturn with a record 75,000 mortgage repossessions, interest rates at 13% and many homeowners plunged into negative equity. Bankruptcies increased and relationships broke down.

By 1992, unemployment had risen to over 10%, although the UK technically came out of recession by the time it left the Exchange Rate Mechanism (ERM) on so called Black Wednesday in September 1992.

We’re seeing unemployment rise again now. There’ve been three quarters of a million job losses in the UK since lockdown in March this year and the country is now officially in its first recession since the financial crisis just over a decade ago.

Although the unemployment rate remains surprisingly low at 3.9%, it’s been described by economists as the lull before the storm, ahead of the furlough scheme finishing at the end of October. Experts predict it will rise to 7% by the middle of 2021.

A total of 9.6 million staff have been put on furlough and The Office for Budget Responsibility (OBR) has warned 15 percent of those currently on the Job Retention Scheme are at risk of unemployment. That would leave 1.4 million workers without a job come October.

The furlough scheme has cost the British tax-payer £33.8 billion. Eventually that money will have to be paid back and it’s inevitable that taxes will have to rise.

But there are some differences compared to the 1980s in that interest rates and inflation remain low and there is still a pent up demand for property, which is in short supply. Mortgage lenders, though, will be more reluctant to lend as the months progress.

So back to the recruitment conundrum. We’ve been receiving up to 5,000 CVs a week for estate agency, lettings and financial services roles – half of which are from experienced staff. We’ve changed our business model to create work opportunities for people working from home in new locations through our Partnership scheme, which is proving extremely popular, supported by our branch network.

There also has to be room in estate agencies to bring new people into the business using the schemes just announced by Chancellor Rishi Sunak. This includes the Kickstart scheme, with the government funding 6-month work placements for 16 to 24-year-olds, who will receive training on the job.

We’ll certainly be providing opportunities and will aim to promote from within once the scheme is over – depending on the state of the market at the time. This is in addition to traineeships and recognised apprenticeship schemes. Young people are also tech savvy and well versed in using digital channels to communicate.

You have to applaud the Government for its efforts to boost the housing market and keep the economy afloat during the Coronavirus pandemic. But this really is the calm before the storm and any predictions we might make now about the housing market next year will be wide of the mark.

My best advice is to make hay while the sun shines and don’t take a holiday. You won’t get any sleep in March as deals will be done right until the Stamp Duty deadline is over. There’ll be plenty of time for holidays after that. Let’s all pray that a vaccine for coronavirus comes sooner rather than later.

The smart money is on digital

As one sector goes down, another comes up and the increasing reliance on digital technology across many industries, ours included, shows no sign of abating.

We’re embarking on our own digital transformation project, embracing new ways of directly engaging with the public and relying less on the portals.

Inevitably, we’ve been increasing our use of Facebook and video marketing to reach those audiences who aren’t even looking to buy. Our FLINK technology has been transformational in enabling this to happen.

But news has reached me of a new Facebook widget which uses geotagging to track whether people are looking at other agents’ properties, new build show homes or open homes when they start again. How useful is this? If you can then target those interested parties with your own property ads, you’re onto a winner.

Agents who’ve been napping over the last five years when it comes to digital technology are going to be hit the hardest over the months and years to come. Those who were on furlough and didn’t use the opportunity to update their skills could well find themselves out of a job.

It’s never too late to get on board the digital train. Don’t be the one left behind on the digital platform.