7 mins read
Updated 5th June 2020
2020 has been a difficult year for estate agents. At the start of the year there were tentative signs of a resurgence in the residential property market. Confidence had returned in many areas of the market, and some of the latest data shows some of the highest rates of house price growth in over a year. Now, the property market has effectively ‘frozen’ as a result of Covid-19, and estate agents are bearing the brunt of the economic impact.
In this time more than many others, sharing advice and support is so important. We’ve compiled here a list of some of the financial support estate agents can access, and how to go about getting it. In the next few days we’ll also be looking at other forms of support - networks, virtual tools, and advice - that are just as important to your business.
Bounce Back Loans
On 27th April, the Chancellor announced a new loan scheme targetted at small businesses. These ‘Bounce Back Loans’ allow businesses to borrow £2,000 and £50,000, interest free for the first 12 months.
The Bounce Back Loan scheme will launch on 4th May 2020. To apply for these loans you should complete a short online form. To fulfil the eligibility criteria, you must be a business: based in the UK, that has been negatively affected by coronavirus, and was not an ‘undertaking in difficulty’ on 31 December 2019. You will not be eligible for the loan if you’re already already claiming under the Coronavirus Business Interruption Loan. However, if you’d like to transfer your CBILS loan into the Bounce Back loan scheme, you will be able to do this until 4th November 2020.
The Chancellor has assured that ‘for most firms, loans should arrive within 24 hours of approval.’
Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme is a temporary scheme open to all UK employers for at least three months starting from 1 March 2020. Estate agents can take advantage of this scheme to ensure they do not have to make any employees redundant during this difficult period.
You will be able ‘furlough’ some or all your employees and claim a grant from the government to cover 80% of their salary. If there is not enough work or you are struggling financially, whilst the property market is ‘frozen’, you will not need to let any employees go.
The government has now introduced an option for ‘part time’ furloughing, which will come into place on 1st July. This scheme will allow you to have employees back for reduced hours, but still ensure they are compensated when you don’t need them. You’ll be responsible for paying your employees for any hours they work. And the Government will cover 80% of any leftover hours under the Coronavirus Job Retention Scheme.
There are however some deadlines that you need to be careful not to miss if you want to take advantage of these schemes. The deadline for new entrants to the Coronavirus Job Retention Scheme is 30th June. This means that the final date an employer can furlough an employee for the first time is the 10th June. This will ensure they have completed the initial 3 week furlough period before the 30th June deadline.
More information about the new elements of the scheme are due to be released on the 12th June.
How it works / who can claim
Estate agents are able to use the coronavirus job retention scheme at any time during the 3 month period from 1 March 2020. You just need to be a UK business that created and started a PAYE payroll scheme before 28 February 2020.
To be eligible employees must have been on your PAYE payroll from 28 February 2020. They can have been on any type of contract (including a flexible hours contract). If you’ve made any employees redundant since the 28 February, you are allowed to rehire and furlough them so that they still have some income. Once the scheme has ended you can decide whether it is feasible to keep these employees on or to continue with their redundancy.
What is furloughing?
Someone is furloughed if they remained employed but are not undertaking work. It’s essentially a paid leave of absence.
To be eligible for the government scheme a furloughed employee can not do any work for or on behalf of your business, including ad hoc services. If you ask your employee to carry on working on reduced hours, you will not be able to claim the government assistance to pay their salary.
Do furloughed employees get paid?
Yes, if you furlough your employees they’ll still be paid. You’ll be able to claim a grant for 80% of furloughed employees’ usual monthly wage costs - up to £2,500 - plus the associated National Insurance and pension contributions. On April 6th the governmnet has clarified that this 80% will include: wages, past overtime, fees, and compulsory commission payments. Any discretionary bonuses and commission payments however can’t be included.
You can choose to ‘top up’ the other 20% of your employee’s salary, but you are not obliged to do so.
How to claim
To be eligible for the subsidy employers should write to their employee confirming that they have been furloughed. Make sure to keep a record of this letter.
You will then apply online through HMRC for the coronavirus job retention grant. You can make a single claim each 3 weeks.
The online service is now available, and you can back date claims for any employees furloughed from 1 March 2020. When applying you’ll need the following information:
To claim you will need:
ePAYE reference number
Number of employees being furloughed
Claim period (start and end date)
Bank account number and sort code
Once HMRC have received your claim and confirmed that you are eligible for financial support, they will pay it via BACS payment to a UK bank account.
Business Rates Relief
Estate agents were originally not included in the business rates exemption program, but on 25th March 2020 the UK Government announced that estate agencies would now qualify for business rates relief.
Now from the 1st April, estate agents will qualify for 100% relief from business rates for the year 2020-2021.
You shouldn’t need to take any extra action to qualify for this financial support. Your local authority should reissue your bill automatically. If you do not receive this updated bill, it is vital to be in touch with your local authority as soon as possible. You will need this revised bill to qualify for the relief.
You can estimate the amount of business rates relief you will qualify for using the government’s business rates calculator
Coronavirus Business Interruption Loan Scheme
Some estate agents will also be able to apply for the Coronavirus Business Interruption Loan Scheme. This scheme is designed to support small and medium-sized businesses with access to loans, overdrafts, and financial support up to £5 million, for up to 6 years.
If you have to close during this period - as many estate agencies will have to - you will be given the financial security to weather the storm. The government also pledges to pay interest payments and lender fees for the first 12 months of the loan, so that there are minimal upfront costs.
To qualify, your business must be UK based and have a turnover of less than £45 million. To apply, contact any major bank or lender to discuss the steps forward; there are over 40 lenders working with the government to offer the scheme.
If you need any support or further information we are happy to help in any way we can. Get in touch with us on: 020 3608 6556 or email: email@example.com
Compare Local Estate Agents
See which agents will do the best job of selling your home.
Coronavirus: Should I continue with house viewings?5 Jun 2020
**Update June 5th 2020:** The new Government guidance to 'Stay Alert' means that in-person house viewings can resume in **England**. Social distancing measures and precautions must be followed closely. The prospect of having strangers coming to your home during this time might be stressful. But, handled carefully and sensibly, it *is* possible to continue with your home sale. ### Expect fewer viewings, but more motivated viewers There have been reports in the media of estate agents seeing fewer potential buyers requesting to view homes. Anecdotally this appears to be true. But many estate agents *also* report that those who are requesting viewings are **more motivated to buy**, and **more likely to put in an offer**. This suggests that the outbreak of coronavirus has encouraged fewer people to ‘window shop’ houses they are unlikely to buy. You should therefore expect fewer viewings. Do not worry. These buyers are likely to be...
Coronavirus: Financial support for estate agents5 Jun 2020
Updated 5th June 2020 2020 has been a difficult year for estate agents. At the start of the year there were tentative signs of a resurgence in the residential property market. Confidence had returned in many areas of the market, and some of the latest data shows some of the highest rates of house price growth in over a year. Now, the property market has effectively ‘frozen’ as a result of Covid-19, and estate agents are bearing the brunt of the economic impact. In this time more than many others, sharing advice and support is so important. We’ve compiled here a list of some of the financial support estate agents can access, and how to go about getting it. In the next few days we’ll also be looking at other forms of support - networks, virtual tools, and advice - that are just as important to your business. Bounce Back...
Homeowner Sentiment Survey: How is coronavirus affecting the property market?19 May 2020
Updated 19th May 2020 We don’t think many people could deny that 2020 has been a tumultuous year. And, the property market has not been spared. At the start of the year there were tentative signs of a resurgence. Confidence had returned in many areas of the property industry, and some of the latest data showed the highest rates of house price growth in over a year. When the lockdown began the property market underwent an effective ‘freeze’, but now the Government has introduced new guidance, allowing home moves in England to start up again. We’ve been regularly talking to homeowners all over the UK to see how they are feeling in the context of the coronavirus crisis. This time, for our third survey, we spoke to 940 homeowners. 49% were planning to sell, and 43% were currently on the market. The remainder were homeowners who told us they are...