The furlough scheme extension: is it working for agents?

A few months ago, most of us had never heard of the word ‘furlough’, let alone knew what it meant. 

But since lockdown arrived, this coronavirus-induced ‘leave of absence’ has become a big part of our lives. 

And although many estate agents admit their businesses couldn’t have survived without this vital help from the government, the furlough scheme hasn’t been without its teething problems. 

With the government job retention scheme now set to continue until October 2020, what are staff who remain on the scheme allowed to do during their furlough period? And how has the scheme been working in practice for estate agency owners?

Furlough Dos and Don’ts

While on furlough, employees are allowed to:

  • Undergo training, as long as it doesn’t generate revenue for the employer’s organisation or an associated organisation. So, an agent who is furloughed can’t join a training scheme that generates revenue internally. or for a third-party training organisation that has a training contract with the agency. If employees do undergo training, they must be paid the National Minimum Wage that applies to them
  • Become a volunteer, provided it does not conflict with their ability to return to work by taking on, for example, a three-month commitment to work part time for a local charity. Also, agents cannot be asked to ‘volunteer’ to do unpaid work within the business, such as supporting non-furloughed staff in their roles
  • Work for another company, if they are not breaching an existing contract

While on furlough, employees are not allowed to:

  • Conduct work of any kind for their employer. This means that even asking a staff member to pick up a set of keys or drop off some paperwork would be a breach of the terms of the furlough
  • Move in and out of furlough on a casual basis: employees must be furloughed for at least three weeks, but they can go in and out of the scheme multiple times.

Challenging few months

“’It’s been a challenging few months, but the furlough scheme is actually working really well,” said Rachel Impey, payroll manager and chartered certified accountant at Bulley Davey, which has clients in the property sector.

“We’ve been processing claims for more than 250 of our clients a month from our office in Peterborough. HMRC has been paying out promptly and efficiently, which has been a very pleasant surprise.”

Among estate agents on their books, Bulley Davey has seen a pattern of agencies mixing furloughing staff and keeping others on as normal – either working from home or from a socially-distanced office. 

Furlough length

“The key grey area we’ve come across is regarding the period of the furlough,” said Rachel.  

“The minimum furlough period is three weeks, but some of our clients furloughed an employee for only a week, not realising that they wouldn’t be able to claim for them. 

“We’ve tried to keep our clients as informed as possible, but quite often we’ve been finding out about changes to the HMRC guidelines at the same time as them. It’s definitely been a steep learning curve, but it seems to be working well now for all parties concerned.”

Retaining staff competitive drive

At Cardiff-based sales and lettings agency Jeffrey Ross, just over half the workforce have been furloughed, but managing director Ross Hooper-Nash is nonetheless bullish about the company’s future. 

“It helps that the Cardiff market is strong, but we’re achieving nearly 70% of what we were doing this time last year with only half the workforce,” said Ross. 

“The furlough scheme has allowed us to keep our staff in employment, but it’s also shown me how much potential there is to get more out of people than we were previously. 

“I’ve had no problems running the furlough scheme – we’ve stuck strictly to the rules because I didn’t want anything to come back and bite me – but I do have concerns about staff complacency when they return to work. Will they still have that competitive edge after having had what is effectively a paid holiday?”

Maintaining communication

One of the key problems faced by furloughed staff is that they can feel out of the loop with fellow colleagues. 

It’s vital to ensure they’re kept up to speed about developments within their area of expertise. For example, if a house sale that a furloughed member of staff had been instrumental in pushing through finally goes to exchange or completion, let them know

Expansion plans

Despite the pandemic, Ross has pushed ahead with his expansion plans for Jeffrey Ross, personally negotiating the acquisition of a lease for a new 10,000 sq ft headquarters during lockdown, which the company plans to move into later this summer.

The new offices will bring his surveying, insurance and architectural services together under one roof alongside his sales and lettings teams. 

And the spacious premises will also be the UK property industry’s first purpose-built, social distancing-compliant office, with plenty of space in which staff and clients can safely interact.  

The company is now in the process of having the existing office layout removed and replaced with a new, COVID-compliant structure including socially-distanced desks, additional hand washing facilities and clear separation between workspace and customer-greeting space.

“As a business owner, I must admit I’ve really enjoyed this lockdown period,” said Ross. “It’s given me time to reflect, a new lease of life and a clearer picture of what I want to achieve when we eventually get back to normal.”

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Author: Nigel Lewis, property journalist