New projections released by UK-based house buying website, CashHouse.co.uk, show furloughed homeowners could be in for a surprise come November. Their research uncovered that the Furlough Scheme, which supports over 9 million workers, ends with disastrous timing for homeowners.
“Unfortunately, the ban on repossessions also ends on 31st October 2020 – the exact same date as the UK furlough scheme ends”
Dr Sermed Mezher – CashHouse.co.uk
The research combines government data and professional surveys to calculate the number of people at risk of losing their homes. Specifically, these are a quarter of workers with a mortgage, who are currently furloughed, and without sufficient savings. This new data suggests that over 400,000 homeowners will therefore be exposed to repossession.
“Based on our projections, policymakers and regulators should take action to prevent a second housing crisis”
The projection was met with some controversy from professionals within the industry. One property investor, having avoided reading the piece, dismissed it as “a scare report from a fast cash sale company”. Conversely, others argued in agreement: “A lot of people will be waking up to find their job no longer exists”. Another professional even responded stating that “the repercussions of this will ruin more lives than covid 19 ever did”.
Although the projection has been met with some criticism, the fundamental message remains difficult to ignore. Working in HR, we are more painfully aware of the unrelenting job losses that have already begun. To elaborate, even with the Coronavirus Job Retention Scheme still active, The Guardian shows over 60,000 jobs have been lost. This number is still rising, and for businesses who have been traditionally seen as stable. Noteworthy companies that have cut jobs are Rolls Royce (9,000 jobs), BP (10,000 jobs), Centrica (5,000 jobs) and Bentley (1,000 jobs). Many companies have not announced jobs to be axed, but leading surveys indicate there could be more than we think.
Matthew Smith, lead data journalist at YouGov, recently polled 504 business owners on their upcoming plans with workers. Of these owners, 51% said that they will need to lay off staff after the UK furlough scheme ends. Approximately 2 in 5 of those said that at least 30% of their workforce would have to be let go. With 31 million workers in the UK it certainly seems that the worst of the damage is yet to be done.
In contrast, there are some companies, such as Amazon and Zoom, who are facing great success riding the pandemic wave. With so many job losses to come you might ask why employees facing redundancy cannot relocate to these boomers? The answer is that businesses profiting from the current situation are few in number. In the last quarter of 2019 there were approximately 850,000 vacancies compared to only 450,000 in the last 3 months. The number has fallen off a cliff, representing the largest reduction in job vacancies since record keeping began. Employees facing redundancy will therefore be stuck in a black box with no lifelines except minimal support from Universal Credit.
We do not know if the projections made by CashHouse.co.uk will hold true. It is certain, however, that many of us have difficult times ahead. To limit further damage to people from this pandemic, we must not ignore the early warning signs of incoming danger. Especially since that is exactly how we landed in this situation to begin with.Editorial Team, HRNews.co.uk