Lockdown Losses - three attempts to quantify cost of crisis to agents

Business consultancy TwentyCi is the latest to try to put a value on the potential losses to the property industry and national economy in the current lockdown.

It claims that those moving house in a typical year are worth some £50 billion in spending, equivalent to some 2.4 per cent of the UK’s gross domestic product.

The consultancy has produced the figures by measuring the direct impact on agents, house builders, conveyancers, surveyors and removers.  

Amongst the sectors the consultancy looked at was, perhaps surprisingly, the automotive industry: it says that “there is a strong and significant link between people moving house and buying a new or used vehicle.”

PropTech sales progression platform View My Chain - which worked on the data with the consultancy - says there are currently 428,000 ‘frozen’ housing transactions beyond the sale agreed stage but unable to complete during lockdown.

It says an exit strategy from the lockdown is required, “and fast,” to save the transactions, the contributions to the economy and the commission that would go to sales agents.

Estate agency Knight Frank last week undertook a detailed assessment of what the current Coronavirus restrictions mean for the industry and the wider economy.

It predicts that there may be 526,000 fewer homes sold this year, with 350,000 fewer mortgage approvals.

That would contribute to £7.9 billion ‘lost’ from potential spending on DIY and renovations, and £395m lost to removal companies.

The government would lose £4.4 billion in stamp duty accompanied by a loss of at least £1.6 billion in VAT related to property spending.

And earlier this week Zoopla suggest that agents have a potential £1 billion in sales commission currently on ice because of the pandemic.

The portal says there are some 373,000 sales agreed subject to contract, worth £82 billion, held up in the lockdown.