Unprecedented. A word that very rarely entered our vocabulary until recently. But now this word is one which we hear used monotonously every day. It is one we certainly seem to have adopted as a nation and industry to best describe the period we are currently experiencing. How long this will last is unknown, but one thing is for certain this most definitely is unprecedented times for my generation of professionals in the real estate world.
Having commenced our careers in the industry post the financial crisis of 2008, we entered a real estate economy of upward moving rents, increasing values, heightened demand and rejuvenated optimism. Participants that survived the 2008 crash were left weary from the period that had ensued but thankful to have seen it through to the other side. Keen to maximise their intake of young employees in order to capitalise on the forthcoming bullish period. This was an exceptional market for us to be entering, having only experienced the recession from our university halls or school corridors, we had little grasp on the market destruction that had just taken place. Job opportunities were plentiful, and we entered the property environment with a naïve spring our step, enjoying the fruits of the early stages of a bullish period in UK property.
The last 10 years, overall, have been a relatively positive period for property and for those of us that started our careers after the crash. Of course, there has been the most recent blip caused by ‘Brexit’. This was a word more widely and monotonously used than ‘unprecedented’ currently is and one I think we are all glad to see the back of. But other than that, it has been relatively plane sailing. Our only experience of a ‘crisis’ being that of our cautious senior colleagues recalling the horrifying stories of that fateful period a few years ago. The market crashed, people lost jobs, values tanked, vacancy spiralled, big companies went bust and we never really recovered. Sat comfortably in a Graduate / Senior Surveyor / Associate Director position, we acknowledge this has happened, but it all seems a distant occurrence that, whilst interesting, is not something we have to worry overly about. Until now.
The International Monetary Fund have warned this virus could push the UK into its deepest slump for a century. The Office for Budget Responsibility has warned the pandemic could see the economy shrink by a record 35% by June. The OBR expects an impact on unemployment, which is estimated to rise by 2.1 million to 3.4 million by the end of June. Under this scenario, unemployment would hit 10%, from its current 3.9% rate, before easing to around 7.3% at the end of the year. These are all worrying predictions and are scenarios unseen for my generation in the property industry. So as a group we need to adapt, and we need to adapt fast.
We know that a great number of the workforce are being furloughed and this is particularly prevalent for the more junior members of staff. Now many of my generation, the Graduate / Senior Surveyor / Associate Director level employees who were enjoying the fruitful market are being told they legally cannot work for a 3-month period, whilst receiving 80% of pay. This is extremely demoralising and worrying times for us, it is hard not to take this personally, but I think it is important to note that in the majority of cases this is by no means performance related. Companies see this as an integral move to ensure the long-term safety of their finances. As is always the case, the younger employees are the ones who will take the fall first, with the more experienced staff in place to steer the ship to ensure we all have a job to go back to once this period is over.
But for those of us still in full time employment, it is time to show our worth and time to adapt. It is time to adapt to new ways of working using the wide range of technology available to us, and it is time to adapt to what is a very different market to that we have cut our cloth on. It is extremely tempting right now to be idle and not to work to our full potential whilst waiting for this to blow over in the comfort of our home. Adapting to technology is not so hard for us having been brought up on tech, so using Zoom calls to co-operate is nothing new but what isn’t so easy is educating our more senior colleagues on how to use this effectively! What is going to be tough for our generation though, having not experienced this before, is adapting to this recessionary market with a lot of our peers being furloughed and unemployment rising. We have to learn quick.
At Jansons our sympathy goes out to every single person who has been badly affected by this virus. Whether it is losing someone they know, losing their job or not being able to see loved ones to name just a few horrible repercussions of this dreadful pandemic. But those of us still fortunate enough to be healthy and have our employment intact should be using this period to keep chugging away and to seek opportunity. Property is all about identifying opportunity. There is always opportunity out there, and this period is no different. A turbulent market like we find ourselves in is a fundamental producer of a mass, unprecedented move in the market. This opens up price restructuring, organisations buying/selling and a change in property economics. It is particularly imperative right now that we are proactive, act on these opportunities and prove our worth during this crisis, to show that we can contribute not only during the good times, but also during the worst of times. We need to be entrepreneurial, work hard, facilitate new ideas, identify opportunity, be flexible and be an important part of our respective team. This will ensure our generation can come out of this with our heads held high and to show that we can handle a deeply bearish market, as we have certainly shown that we enjoy a bullish market over the last 10 years.