UK Estate & Letting Agency, then, now and beyond…
So, are we clear on Estate Agency? “An estate agent is a person or business that arranges the selling, renting or management of properties, and other buildings… ” as quoted from Wikipedia. So, all in all, quite simply really?
Estate Agency took over from the original House Agents and Land Agents and made a name for it’s self in the second half of the 20th century where today we have an array of agencies types from independent agencies to national chains, traditional high street and hybrid/online.
What should one expect of an Estate / Letting Agency? “Estate agents need to be familiar with their local area, including factors that could increase or decrease property prices. e.g. if a new road or airport is to be built this can blight houses nearby. Equally, the closing of a quarry or improvement of an area can enhance prices. In advising clients on an asking price, the agent must be aware of recent sale prices (or rental values) for comparable properties.” again, Wikipedia quoted.
A common question is what qualification do you need to become an estate agent? Well I would say that you do not need any and neither is there a legal body that you must come under, though their are varied bodies that have membership within the industry and provide an agency with both a professional badge to ID themselves to consumers and a central point of communication for guidance and support as per Ombudsman for Estate Agents Scheme, INEA The Independent Network of Estate Agents and then the likes of NAEA who have had criticism in the past for not keeping up to date with the industry and supporting their members. If you are offering lettings then there are more regulations to adhere to altogether, but we still get to hear of many agencies trading and carrying out illegal works. There is still for sure a major gap in the UK property industry for a singular, government backed, regulated body to enable estate and letting agencies, both traditional and online, to adhere to a uniform code of practice.
Marketing? It has been something quite straight forward when you look at just a generation or so back whereas it was mostly a strong high street presence along with local advertising from newspapers to leaflet drops which enabled the local estate agency to find listings and help to sell property. Today it is a whole new topic and indeed a skill in itself from the emergence of major property portals to estate agency softwares, the growth of the internet giving us websites and social media plus so much more. Each and every week innovation hits the UK estate agency sector, by way of #Proptech, and neater and defined softwares/tech are launched to aid estate agencies such as live online chat, live property valuations, property repair reporting and drone photography.
Bringing this up to the current, not only is the industry seeing a great many changes in both the way it markets itself to consumers and the role of an estate agency evolving with many virtual services offered, we now have to contend with a new era for the UK property with Brexit and current strong demands for new affordable housing and overcrowding from mass immigration in to the country.
So, Estate Agency of the past and that of today involves no predictions, but what about future? Where is estate agency heading?
#Proptech is the word of the moment, be it in just drawing board ideas, innovation, virtual, cheaper fees, online booking forms, drone photography and more that make up this collection of industry advancements which it is vital estate agencies of today take note and adapt their businesses to take on board.
“ Estate Agency is ever evolving and if you stand still, you are effectively going backwards. I think over the next 5 to 10 years, there will be a rationalization of high street agents for sure and an increase of online, low cost and hybrid agencies. However good high street agents who embrace technology, improve their service offering as opposed to selling to people and can demonstrate a perceivable difference, will continue to thrive and prosper and be able to maintain a good fee level. Moving home is still essentially very emotive and most sellers still like the reassurance of someone to go to in the event of there being an issue and talk face to face. That will not change. There is a place for both online and high street agency, choice can only be good for the consumer and ensure agents of both denominations keep improving.” Maurice Kilbride of Maurice Kilbride Estate Agency
So, adapting is a key thing here for estate agency for the future. I do not think that knee jerk reactions are required, you do not have to change your business model, ie traditional vs hybrid, in order to compete in any business sector as the same service is sold at varied price levels from wines to hotel bedrooms in today’s world. What is also vitally important is to embrace the way in which consumers are interacting these days with estate agencies from booking viewings to finding the right estate agency to market their property – is a presence on social media more important than having an estate agency app, will a virtual 360 tour increase viewings and offers on listings compared to the likes of conventional ‘open house days‘ etc?
“I believe technology is contributing to the way the consumer is dealing with businesses and there are pros and cons. The pros are they should be more informed and in theory have more choice but in reality there are cons which are that there are a lot of conflicting views which only serve to confuse the consumer.” Oliver Wharmby of Lonsdale Insurance Brokers.
I also asked Christopher Watkin, an industry leading letting agency growth guru, the following questions:
UK Estate Agents current issues are cheap fees, growing market share and over-valuing. Your thoughts Chris?
“These are the same issues you had 10 years ago, 20 years ago, 30 years ago … the players might be different (it might be Purplebricks today but it was Telipo in 2010) but the stage and theatre we play on are the same. The biggest problem for estate agents getting called out for the free valuation, because without an free valuation, you don’t get the listing and you don’t get sell or let the property and you don’t get paid.”
Should Estate Agents design their own Purplebricks-esque online packages?
“I am baffled about High Street estate agents who are designing their own online packages to run alongside their High St offering. What if their Online offering becomes successful? They could be creating the very monster (all of UK estate agency goes online and away from the High Street) they are so worried about battling?”
So, what else can we predict for UK estate agency?
I personally think we are moving closer to that sell it yourself concept, the days of Sarah Beeny’s Tepilo which was probably too advanced at the time, will come in to play. Look at the likes of selling your car today, take a snap, upload to Auto Trader and carry out the sale yourself (legal/financial help sometimes needed on high valued purchases and third party expertise such as mechanics checks also required as per what would be required with property purchases in many ways). Choice is great, high street agencies thumbs up in my book and to be honest, most of their fees are relatively fair thanks to the hold your hand through the sales process service they offer, hybrid / online give a great economical option for those willing to take on more of the foot work themselves… Sell it yourself soon to be added to that equation?
Some estate agencies out there are adapting with great marketing innovation, some are still sticking a traditional service / marketing level and then also there is the cheaper / virtual options via hybrid. Many are relying on traditions, their name, long standing community presence… Time will tell who will still be around in the next few years as the market share for each is lessening with fewer property available on the market, more competition and a big knock down on the average fees to consumers to buy / sell property = less profits to estate agencies.
In the end the consumer will always decide. They are the ones paying the money and usually the ones with the products that the estate agencies require to do business, ie property. As new generations hit the property world and older generations leave the market, will we be seeing a whole new trend in the way property is bought and sold?
PS: Thanks david re arla conference. More to follow… Chris.
You May Also Enjoy
Breaking Property News – 24/04/24
An average rate of 6% for the first time since November – Rightmove’s weekly mortgage tracker
Understanding Property Valuation: A Simple Guide
Aberdeen is cheapest city to be a first-time buyer
Breaking Property News – 23/04/24
