Foxtons: Estate agent cuts pay for high earners

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Foxtons signImage source, Getty Images

Estate agent Foxtons has cut pay for higher earners and furloughed hundreds of staff members in an attempt to protect the firm from coronavirus.

Employees earning more than £40,000 have been asked to take a 20% pay cut for April and May.

Its boss, Nic Budden, said the London property market had been "severely disrupted" by lockdown measures.

The London firm wants to cut its monthly outgoings from £9m to £3m by the end of April.

All of its branches have been closed since 23 March, days after the government urged all Britons to avoid non-essential travel.

About 750 of its employees were furloughed two days later under the coronavirus job retention scheme.

Foxtons confirmed that about 80% of non-furloughed staff had accepted the proposed pay cut of one-fifth of their basic salary.

Executive directors will also take a voluntary 20% reduction in base pay until at least the end of May.

Severe disruption

The firm said it was is too early to forecast the full impact of the coronavirus pandemic on the business, but that sales and lettings had already been affected.

"This is an extremely challenging situation for everyone," Foxtons chief executive Nic Budden said.

He added: "I am confident we have taken the right measures both for our stakeholders and the business so that we can emerge from this crisis with the capability and financial position to thrive."

In a bid to raise cash during the coronavirus pandemic, the company also proposed a share sale, representing about 20% of its issued stock.

In an announcement on the London Stock Exchange, the firm said it hoped to raise up to about £22m.

Slowdown in sales

The number of new property sales agreed in the UK has fallen by about 70% since the start of the coronavirus restrictions, according to homes listing website Zoopla.

Although the government has not banned people from moving house, it has advised against it for the purpose of social distancing.

It says: "There is no need to pull out of transactions, but we all need to ensure we are following guidance to stay at home and away from others at all times.

"When the property being moved into is vacant, then you can continue with this transaction, although you should follow the guidance... on home removals.

"Where the property is currently occupied, we encourage all parties to do all they can to amicably agree alternative dates to move."