Will Plan B and the Omicron variant close the housing market down?
The property market is once again at a crossroads, with the Bank of England deciding next week if it will raise the base rate to offset the 5% inflationary rate that is knocking at the door. Plus, a real shortage of new property coming to the market which started after the end of the stamp duty holiday in September.
To add in another factor, the Omicron variant and the likely crippling effect of its uncertainty, which will make many hunker down until January. What might result is a subdued market which in January may or may not rejuvenate.
The housing market, as I learnt from my many years in the industry, is built on sentiment. If it is boom time everyone dives in. Once things slow, like a great juggernaut it takes a lot to get it going again.
Many pundits point to the fact that there is little property to sell, so the market must be buoyant, but the truth is, lack of stock means that the public are not listing their homes as they do not intend to move.
It was all okay earlier in the year, pre-June, when moving to a £500,000 home meant £15,000 more cash in your hand thanks to the Chancellor, but the grim reality is now, nationally, home prices are £31,000 more expensive than a year ago, and that £15,000 hand out has gone, so the cost of a move is very expensive.
Anecdotally, as a guest at the ARLA conference on Tuesday (many thanks to Nathan Emerson and the team for a superb event), although numbers were slightly down, it was a great turnout with the conference area looking to be very full. But a few days later I now feel that these physical events may well be put on hold, at least until we get out of the first quarter of 2022.
On the positive, and there is always a positive in the digital transformation of real estate, property technology has seen and will continue to see adoption at a rate unthought of, as companies automate their systems to better look after the end-user.
The adoption of AI, Big Data, together with VR and Augmented Reality are really coming into play, not as a replacement for humans in real estate, but as a way of de-risking businesses and allowing them to function and be at work 24/7, which is what the property consumer of 2022 will be seeking out.
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Hybrid or not…What is the right model for estate agents in the 2022?
As we are about to end one year and start the other, it is now the time that companies and people start to contemplate their future and the way they will do business in the coming year.
In line with this, I recently caught up with Rollo Miles, the founder of a thriving London agency, who is still very much mixing it up as to how and where agency is best done.
To be clear, Agent & Homes is still defining what “hybrid agent” exactly means. The company recently opened a physical site in Ladbroke Grove to complement its Notting Hill Hub. The difference is that this new site is on the High Street, just like traditional estate agents are. So, what is Agent & Homes up to?
CEO Rollo Miles says: “Our fight is not with the High Street but with how agents are rewarded and paid. To date most of our 50 self-employed agents work off their little black book and keep between 70 % and 80% of any fees they generate.
So, to keep it simple, if they sell a house for £1m they can take home up to £8k – happy days! However, what we have found is that in order to be super-successful hybrid agents need to find a way of complementing their existing network of clients and gaining new ones, just like traditional agents do.”
As part of its growth plan, as it enters its fourth year of operations, Agent & Homes is rolling out physical hubs to support its self-employed agents. The idea is that where it has a cluster of their agents working, it will open a local hub to support them. This gives agents a physical location to work from and meet clients. It also reinforces local brand awareness and helps link agents to the brand in each area.
But the keyword is flexibility. “The plan is a bit like Pizza Hut, they have some restaurants they own and others which are franchises – and we are doing the same.”
Agent & Homes, therefore, plans to open at least ten local hubs in London to support their agents. These are basically estate agency offices with a twist.
“Gone are the rows of desks, the fishbowl look” says Miles, “instead, our hubs feel like a living room and are inviting. They match our marketing and branding, which is all about people and objects and the home, objects that we collect in common and bring us together, what advertisers refer to as the pebble bowl approach.
The public feel like they can pop in for a property conversation in a relaxing environment. The idea is to get away from estate agency by numbers and reintroduce localism to our profession, just as we say with our motto: Estate Agency Reinvented.”
With the introduction of local hubs, Agent & Homes now offers a clear growth path to agents who want to take the self-employed model to the next level, allowing them to open their own Agent & Homes franchise to complement what they have built up while remaining self-employed.
“What we are doing is staying ahead of the curve and recognising that some agents want more for themselves, but also from us, and the big challenge for all hybrid agents is to be able to deliver fresh valuation leads to their agents, which we are recognised champions at doing,” adds Miles.
If you want to get involved with the Agent & Homes revolution, perhaps start by having a chat with Rollo Miles, a really great traditional agent who has moved the estate agency business model so it fits high-achiever agents and, most importantly, their clients who want to sell and rent.
Andrew Stanton is the founder of Proptech-PR, a consultancy for Founders of Proptechs looking to grow and exit, using his influence from decades of industry experience. Separately he is a consultant to some of the biggest names in global real estate, advising on sales and acquisitions, market positioning, and operations. He is also the founder of Proptech-X Proptech & Property News, where his insights, connections and detailed analysis and commentary on proptech and real estate are second to none.