London Estate Agents – Earning Half the Tea in China.
My fellow geniuses and I at eMoov have just finished a cool piece of research. It will shock you. And if you’re an estate agent of the dyed-in-the-wool variety, spare your blushes and look away now.
We thought it would be informative, probably shocking and certainly controversial to analyse the amount that Londoners have spent on estate agency fees in the last year that figures are available for.
To put this in context, in a rolling 12 month period there were 108,891 homes sold in the London boroughs. That’s about 12% of the UK total. We used the Office of National Statistics to provide this data.
Unsurprisingly, London has the highest house prices in the country and, almost, the world. We found that the typical London property value is now £579,478.
Which means that across the capital the average home seller pays over £8400 in estate agency fees.
When we rolled up our sleeves and delved into each borough, there were some startling stats that transpired. For instance, Kensington & Chelsea has an average house price of knocking on the door of £2m and, given its 2241 sales each year, paid over to its largely traditional, multi-branch estate agents a whopping £62.3m in estate agency commissions. In fact probably more, because for consistency we’ve used the 1.22% plus vat that My Home Move conveyancers states as the average UK estate agency fee (20,000 transactions in 2015) even though in Prime Central London especially, it’s nearer 2%. Conservatively, a Kensington and Chelsea’ite is therefore relieved of nearly £28,000 for every home sold in the Royal Borough. A big ouch, even for the well heeled.
£62.3m is rather a lot of money. In fact it’s more than the Government recently increased it’s spending on space technology by. And more than the Chinese spend on computer fibre optics.
The league table of rip-off estate agency costs in London includes £54m spent in Wandsworth; £35m in Camden; £20m in Hackney; and £11m in Newham which, respectfully, is by no means the most affluent part of the city and surely can little afford to line the pockets of estate agents so.
With the exception of the handful of transactions in the square mile, Barking and Dagenham is bottom (or top, depending on how you look at it) for its willingness to grease the palms of our sharp suited property peers. ‘Only’ £7.6m is handed over annually there, an average of £3,405 a pop.
The total amount paid out by Londoners in our analysis over the year? £861.5m. That’s eight hundred and sixty one million, five hundred thousand pounds. Or, if you like, just an exaggerated lounge measurement away from £ billion.
Not quite all the tea in China, but close.
(For the record, China produces 855,000 metric tonnes of tea each year. It’s current price is £2.30 per kilo. That’s about £2billion. In other words, each year London estate agents are earning half the tea in China)
Seems unfeesable (mis-spell intended). But it’s true.
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