Estate agent revenues plummet as transactional decline hits home
The latest research by estate agent comparison site, GetAgent, has highlighted the declining revenue of the average UK estate agent due to a reduction in transactions, largely driven by the industry-wide lockdown as a result of the coronavirus.
GetAgent looked at the average fee charged by estate agents and what the total potential value is when considering all residential transactions. GetAgent then compared this to market performance over the last year and five years to see how lucrative it is to be an estate agent in the current market climate.
In the financial year of 2015-2016, the average estate agent charged a fee of 1.3%+VAT which equated to £2,622 on the average house price of £201,695; £3,146 when taking VAT into account.
Fast forward five years and this fee has dropped marginally to 1.25%+VAT, however, with house prices climbing to an average of £231,906 the average agent has seen income from each transaction climb by 10.6% to £2,899.
The difference? A -11.8% reduction in transactions, meaning that five years ago the 1,321,630 annual transactions within the resi market would have made the industry nearly £3.5bn in fees.
With the lockdown in March seeing agents restricted throughout April and transactions plummeting as a result, this total value has seen a notable decline, with £86,373,744 lost in fees.
Between 2018/2019 financial year and 2019/2020, the data also shows transactions have fallen by -1.9% meaning that while the average estate agents fee has still increased when compared to this time a year ago, the industry as a whole has seen revenues fall by nearly £25m where the fees secured on completed transactions are concerned.
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Period
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Average Fee (%)
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UK AveHP (financial year – 1st Apr to 31st March)
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Average Fee (£) Not Inc VAT
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RESI – Property Transactions
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Total Value (average fee x transactions)
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2015-2016
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1.3% + VAT
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£201,695
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£2,622
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1,321,630
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£3,465,360,117
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2018-2019
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1.25% +VAT
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£229,163
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£2,865
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1,188,200
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£3,403,643,458
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2019-2020
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1.25% +VAT
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£231,906
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£2,899
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1,165,640
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£3,378,986,373
|
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Average estate agent fee sourced from GetAgent.co.uk
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