x
By using this website, you agree to our use of cookies to enhance your experience.
By Graham Norwood

Editor, EAT & LAT

award
award award
award award

OTHER FEATURES

Three reasons why estate agency should be first out of lockdown

The coming week’s stories in the mainstream media - inevitably focused on Coronavirus - will be dominated by two things.

Firstly there will be debate about how Britain can mark the 75th anniversary of VE Day in a way that’s appropriate given the current crisis; the second, and the one I’m discussing here, will be when and how the lockdown is relaxed, with an announcement expected at the latest on Thursday.

There’s already been speculation aplenty on this, with many industries and groups lobbying the government with arguments about why they should be amongst the first to be allowed to open their doors again - albeit in a new era of social distancing.

For all those not involved in the property sales or lettings sectors, and especially those not well disposed towards estate agents at the best of times, there may be few good reasons in their minds as to why our industry should be amongst the first to open up.

Therefore it might be useful to pull together the various reasons why agency is a special case - and deserves to be treated so by government.

Firstly, there’s the much-quoted multiplier effect.

Knight Frank has done all the heavy lifting here, explaining exactly why allowing house sales and lettings to go ahead will generate far-reaching benefits for the wider economy.

It forecasts, rather gloomily, that there will be 526,000 fewer home sales in 2020 because of Coronavirus - that’s a drop of 38 per cent on last year and it’s based, of course, on the assumption that the current restrictions are eased gradually through the next two months.

The agency also estimates a consequential loss of £7.9 billion in the DIY and renovation sector and £395m on removals companies. All those decorators and plasterers won’t, in turn, spend money themselves and so on through the economy.

Secondly, there’s the revenue for the government from house moving - and the government is going to need a lot of that in the years to come to pay for the crisis.

Current industry estimates suggest that the loss of sales down to Coronavirus and the lockdown are likely to be between £3.5 billion and £4.4 billion in stamp duty.

There will also be £1.25 billion to £1.6 billion in lost VAT going to the Treasury if property-related expenditure - from removal companies and conveyancers to less spending at Wickes as owners improve their new homes.

Of course many of those same industry bodies identifying tax losses also want stamp duty holidays - but let’s assume that the government holds the line on that.

Few industries provide as much tax revenue for so little effort by HM Treasury, and this is a persuasive reason why our sector should get back to work again PDQ.

Thirdly, and less quantifiable, there’s the psychological importance of moving house: the nearest we’ve come to any solid research on this has come from the consumer group, the HomeOwners’ Alliance, which happened to be conducting its annual survey as the lockdown was entering its second week.

Some quotes from case studies interviewed for the HOA research show how much thought and morale are invested in house moves, and how much that is jeopardised as the lockdown goes on.

It’s not just a case of disappointment, but bitter frustration at dreams which many feel could be permanently at risk - and all that means for mental well-being.

Here are the quotes found by the HomeOwners Association:

    • “Unable to move house now that we have a buyer and are at exchange/completion stage, after having already waited 2.5 years…”

    •  “Unable to sell my late father’s house now. Delaying my brother moving nearer his family…”

    •  “Not able to move house. Part of a divorce and stuck in a house by myself as I cannot sell… ”

    • “My pension will have reduced significantly, probably won’t be able to retire as soon as I would have liked now…”

    • “House could lose value and it may be difficult to move in the future because of a slump in the housing market…”

    • “I've really become aware of the space available when two of us are working from home all day every day is making me realise how tiny our little flat is more stress due to not enough indoor space, not enough outdoor space…”

You get the point - it’s a real blow to people to be told they can’t move, and the blow is magnified by the other challenges surrounding Coronavirus, like having to work from home or teach children or stare out of windows because of no personal outside space.

These are highly persuasive reasons. When details of a more relaxed lockdown are eventually released, debate will no doubt rage about who should and shouldn’t have been included - inevitably almost every industry will regard themselves as a special case.

But for the agency business there are consumer, fiscal and psychological reasons why we should get going again as quickly and safely as possible.

Let’s hope government agrees. 

*Editor of Estate Agent Today and Letting Agent Today, Graham can be found tweeting about all things property at @PropertyJourn

  • icon

    Yep, there are many similar reasons for many if not all industries. Many of these reasons apply to other industries too.

    We’re all in lockdown. We’ll all get out at some point.

  • icon

    I love the way we are all pushing to be let out of lockdown, some director of Knight Frank publishes a list of frankly unimportant tosh so he no doubt can continue to work from home whilst sending his staff into work.

    No one should be out of lockdown until we can be assured that there will not be a second spike, coming out to go back in will be far worse than just one longer lockdown.

    I for one want to go back but am dismayed at the number of people pushing to be let out, it's insanity and I can't help but notice all those pushing for the lockdown to end are also the people who will be quite safe still at home.

  • icon

    Yeah, let's go agents! Key workers all.

    Jeez

icon

Please login to comment

Zero Deposit Zero Deposit Zero Deposit