Challenges Estate Agents Will Face in 2021
Estate agents enjoyed a surprisingly fruitful year in 2020 despite the global pandemic causing chaos in peoples’ everyday lives and the economy sliding into recession.
After the first lockdown ended in May, house sales rose sharply along with sale prices. Although sales began to level in quarter four, 2020 was a lucrative year for estate agents, many of whom had more properties marked as “sold” than they had available for sale.
But what lies ahead in 2021? As we endure a third national lockdown and COVID-19 continues to disrupt businesses across every sector, can the UK housing market continue to boom? What challenges do you face as an estate agent and how can you overcome them?
Housing Market Predictions for 2021
Now that the UK and the EU have signed a trade deal, some of the uncertainty surrounding Brexit has been quelled. However, many property experts are forecasting a less prosperous year than 2020, with house sales remaining flat and minimal (if any) house price growth.
Several factors are likely to impact the health of the housing market this year.
The End of the Stamp Duty Deadline. The looming stamp duty holiday deadline of 31 March is likely to contribute to a relatively buoyant first quarter of the year, but the number of sales and prices will probably drop once this incentive has gone.
Some industry insiders have predicted an extension of the scheme or some transitional relief that will keep the housing market moving, but as it stands, homeowners must complete ahead of the March deadline to benefit from the tax relief.
Withdrawal of the Furlough Scheme. The government’s Coronavirus Job Retention Scheme (CJRS), which to date has kept 9.6 million people in employment during the pandemic, is set to end on 30 April 2021. This is likely to lead to a rise in unemployment levels that are forecast to peak at 7.5% in the second quarter of 2021.
The end of the furlough scheme will narrow the pool of potential buyers and increase the number of sellers postponing plans to move and upgrade to more expensive property, leading to stagnation in the housing market.
Ongoing Restrictions on People’s Freedom of Movement. The current lockdown laws in England end on 31 March. The government hopes to ease restrictions before this date. Scotland, Wales and Northern Ireland have review dates planned in January and February.
Despite the gradual rolling out of vaccines and government efforts to reduce transmission of the virus, it seems likely that some level of restrictions on people’s freedom of movement will continue throughout the majority — if not all — of the year. This will undoubtedly have an impact on the publics’ finances and motivation to undertake significant changes, such as selling and buying property.
It is impossible to predict with any certainty how the housing market will fare in this tumultuous climate. Yet there are certain challenges estate agents are sure to face, and now is the time to develop and implement strategies to overcome them.
Challenges for Estate Agents in 2021 and How to Overcome Them
The Challenge: Pressure to Complete before the End of March. The house sale process is taking up to a month longer than normal due to the backlog of transactions caused by the first lockdown in March 2020. If a vendor wants to buy a property before the stamp duty ends, estate agents could face huge pressure to help them complete on their current and new property in the first quarter of the year. Some estate agents may be wary of taking on such clients for fear of being held accountable if the deal is not sealed in time for the client to benefit from the tax break.
The Solution: Find a chain-free buyer for your client by partnering with a professional guaranteed purchase or chain repair company. An established and reputable provider will have the knowledge, experience and funds to move the deal through fast.
If your client is struggling to sell their home or has fallen foul of property chain problems, your partner can act as a chain-free property buyer and help your client achieve a quick house sale. They are then free to buy their new home before the deadline. What’s more, outsourcing this task will allow you to focus on what you do best — drumming up new business and making sales.
The Challenge: A Reduced Pool of Sellers and Buyers. After the stamp duty holiday ends in March and the furlough scheme finishes at the end of April, there is likely to be a smaller pool of people looking to buy or sell. This means that estate agents will have to work harder to keep ahead of the competition and win new clients.
The Solution: Ramp up your marketing efforts and provide added value to attract new clients. Nearly all property searches start online, and with people confined to their homes more and more, remote selling is the way to go.
Conduct a review of the company website — is it easy to use? Does it have an appealing design? How does it compare to your competitors’ sites? Provide helpful content that engages potential customers and promote this across relevant social media channels.
Boost your online presence by creating a unique selling point (USP) and placing this at the centre of your messaging. What can you offer that your competitors don’t? How can you add value for your customers and deliver a stellar experience? Maybe you can boast decades of experience and extensive local knowledge or extra services such as part-exchange schemes. If you want to attract a diminishing pool of clients, you’ll need to pull out all the stops.
The Challenge: Low Inventory. As the market slows and unemployment rises, it won’t just be house buyers who are thin on the ground. Homeowners who were planning to sell might choose to postpone moving until their personal finances and the economy are in a more stable position. So how do estate agents sell if they don’t have enough properties on the books?
The Solution: Now is the time to diversify and develop new income streams. For example, establish a Land and New Homes department and use quiet times to develop strong relationships with local housebuilders and developers. When the market picks up and there are new developments ready to be added to the market, you’ll be first in line to win these lucrative instructions.
Also, consider reviewing your lead generation process. Referrals are one of the most powerful forms of advertising. Do you have a healthy amount of customer case studies and testimonials? Are these used effectively on the company website and in marketing literature to build trust with potential clients? Have you invested time in networking and established good relationships with local businesses? Inviting guest blogs and running social media competitions in conjunction with other businesses is a great way to score some reciprocal promotion and boost awareness of your agency.
The year ahead may present more challenges than 2020 and you may need to put more effort into succeeding as an estate agent, but there are plenty of opportunities to win new business and wrack up a healthy number of sales if you look for them. Review your current offer, identify areas for improvement and create innovative solutions that will make you stand out from the competition and win those all-important new clients for a prosperous 2021.