The Economic and Human cost of Furlough and Redundancies

The job retention scheme, or furlough, has amounted to an astronomical cost to the government  with the second furlough at approximately £6 billion per month, £200,000 per day and a total of £41.4 billion as at 18 October 2020 to the economy (figures from HMRC). Let us also not forget the staggering human cost that both furlough and redundancies have had across the employment industries. 

The Human Cost

The following graph shows the number of employees furloughed from the start of the scheme, through to mid-October, the numbers have levelled out at 9.6 million. 

When someone is furloughed this raises a number of concerns about the future security of their job. Will their job still be available to them once the furlough period ends? Will their employer invest in and employ new technology that will ultimately make them redundant? 

The next graph depicts the number of furloughed employees who are retained after furlough. We can see a gradual decrease in employee retention as time passes.

What are the implications for the Real Estate sector?

In the real estate sector, the furlough take up is greater than average, so a bigger percentage of real estate professionals are on furlough compared to other professions. 

The line graph shows the trend of furlough take up in the real estate profession, topping out at almost 150,000 real estate workers on furlough in May during lockdown 1. The step effect you can see is in line with payroll month ends, so a cohort of employees are taken back on for the start of a new month. The statistics are not yet out for the lockdown 2 but we can expect to see another jump up.

Furlough by Age & Employer size

Whilst there are many trends to the furlough statistics, the statistics shared here focus on furlough by employer size and by age.

The graph below shows the correlation between employer size and the percentage of firms taking up furlough, this is represented by the bars, orange shows the percentage of firms of differing sizes eligible for furlough and the blue bars are the percentage who have utilised the scheme. 25% of single employee firms took up the chance to furlough, in essence closing their business for the period, 43% of those employing 2-4 staff furloughed at least one of their employees. The bigger firms furloughed higher percentages of employees. They will have seen a drop in work and could spread it out among fewer staff and furlough the rest, this is much less achievable with a small workforce, where it is likely each employee has different specialisms.

This next chart shows that it is older employees who are more likely to have been furloughed, although this could in part be down to the fact that they make up a larger percentage of the workforce to start with. Another factor could be a resistance or less ability to learn the technology that makes home working possible.

The Problem of Furlough

Whilst on Furlough, employees get at least 80% of their salary, but this potential drop in income is not the only issue. 

The stress of being uncertain if you will be retained after furlough can hit hard, and if you are an APC candidate, the ability to gain experience in all the required fields such as inspection becomes impossible during lockdown. The most recent APC cohort has seen the highest level of referrals ever, the lack of experience, stress of furlough and pressure of homeworking is highlighted by this.

Psychological impacts are immense. Feelings of loss of purpose, lack of routine and loss of connection all play a part. If you are used to working and engaging with a large team, a disconnection can create a loss of creativity and team camaraderie.

Employment is seen as a key driver of wellbeing, providing purpose, identity, financial security and routine.

Cambridge Finances Helping Hand

Cambridge Finance understands the many uncertainties surrounding furlough and we want to play a part to tackle this ongoing problem. We are therefore offering  those affected a 30% discount on our upcoming course: ‘Understanding Commercial Property Valuation.’

This offer is strictly limited to those on a) furlough, b) who have been made redundant or c) are APC candidates. We will require proof of one of these statuses prior to booking, and any bookings must be made between 23rd and 27th November 2020.

Understanding Commercial Property Valuation will take place 7th-11th December over 4 sessions. We are offering you this course at a discounted cost of £696.50 over the full price of £995. This is truly a great opportunity for those looking to learn new skills, or a refresher course to get you geared for 2021.

Statistics taken from HMRC –

How has Covid shaped property design?

Coronavirus has had a marked affect on how people want to spend their work and leisure time and has shifted priorities for building design.

Gardens, recently seen as a nuisance and best avoided by some, are now sought after for the offer of private open air space and open plan is falling in popularity as working from home becomes a necessity.

Environmentally friendly properties are sought after as well as features that promote a healthy lifestyle, both physical and mental and give a sense of family togetherness. tells of a recent survey by the Royal Institute of British Architects which shows that most of the homeowners surveyed (70%) thought their home environment and its design affected their wellbeing, especially mentally, during the pandemic.

This survey found that the most popular things looked for in home design with the lessons learnt in the pandemic were:

  • Reconfigure the existing space (23%)
  • Close in open plan spaces (9%)
  • Make more open plan areas (14%)
  • Increased environmentally friendliness including natural light & soundproofing (40%)
  • Flexibility of space (ie, moveable room divisions) (8%)
  • Creation of office space (17%)
  • Room for extended family (7%)
  • More personal space (12%)

This of course applies to all property to a greater or lesser extent. Residential properties need to be prepared for working from home and potential periods of isolation. Commercial properties on the other hand need to be as flexible as possible. Not many businesses will be willing to sign up to long leases, so bespoke fit outs become less palatable. Retail premises are becoming more redundant as online continues it’s inexorable path, so redevelopment as alternative uses becomes attractive.

Perhaps we could solve two problems in one and convert unused retail buildings into homes, just like the conversion of offices to homes became popular.

Industry also needs to follow the new safety protocols, this inevitably means more requirement for space for those that survive the economic tsunami. Amazon has just built three new warehouses in the North of England and plan to take on 7000 new staff. Their warehouses are mammoth, the biggest being in Tilbury clocking in at 2 million sq ft!


This shift in requirement and therefore design will ripple through to all aspects of the real estate profession. From finding investors to fund schemes and proving the profitability of schemes to targeting the end purchaser and ensuring they will be willing to buy the property that is produced.

Financial Modelling plays its part, shorter lease lengths, break clauses and the increased possibility of changing tenants must be factored in.

Adaptability both of financial model and buildings is key.

We cannot cure Covid, I sincerely wish that was in our skillset, but the experts who can are working on that. What we can do is equip you with the tools to adapt your financial models and be able to make well informed, clear and considered decisions quickly.

Real Estate Development & Financial Modelling Course

Construct a robust real estate financial model to assess the financial risk and return profile of development, re-development & refurbishment projects.


Royal Institute of British Architects

Cambridge Finance