About 600 yards or so from where I live, is a very nice bar, a handful of restaurants, a few hair salons, 2 grocers and 9 estate agents. If you then walk across the precinct, you’ll find another 10 or so agents, all on the same road. If you didn’t know the area and weren’t familiar with just how many apartments and student lets there were, it would be easy to think that the area couldn’t sustain this.
As it happens however, they have enjoyed quite a boom over the last three years, well at least that was until the spring of 2016. Discussing business with a few of them, it appears there has been a bit of a slow down. Some blame brexit, many blame new tax laws on buy to lets but others will tell you that the level of business they are getting now, is the level they would have forecast, before the area hit a mini boom.
What I didn’t expect though, was a conversation I had with a West London agent earlier this month. He runs 5 branches, all with low levels of staff but covering a decent patch. His business had been growing solidly until the Autumn of 2015, when all of a sudden, the expected spring seasonal high, didn’t happen.
For the first time since the business started, he and his partners have had to lend personal money into the business, to get it through until the end of the year. So when I asked him what the problem was, he commented on a number of factors, contributing to the lack of business.
“Property over the last few years has been pretty easy to sell in this area.” He said.
“You could set up a branch, pop properties on the online marketplace like Right Move, Zoopla etc. and they were virtually selling themselves.
“The problem is, that’s artificial and before you know it, anybody with a couple of signs, some telephones and an office can call themselves and estate agent.
“Lots of new agents were popping up all over the place, especially in the rental market.
“Quite a few of them were new, low start up cost franchises, cashing in on what they saw as an easy lucrative market.”
“I think one of the biggest problems is, there might be just a few too many of us in the same area right now.”
It’s not often you hear anybody from a particular market, talk so honestly about their business but if an estate agent is saying that there might be too many estate agents, well you have to sit up and listen.
So what does he plan to do about it? How is he going to ensure that he stays one step ahead of the competition?
“It’s pretty simple” He quipped. “It’s no longer good enough to sit back and let it happen.
“We’re using a mixture of new techniques such as our app to promote our properties and we’re also going back to old school methods of distributing leaflets and face to face marketing.
“Good old fashioned phone calls, coupled with ultra modern push notifications is where people need to be. Sure keep people posted by sending notifications but make sure you phone every seller and landlord every single week, to keep them posted on how things are progressing.
“We make a decent rate out of every property we sell, we want our customers to see the value, feel the value and appreciate that we are worth what they pay us.
“If we can sell a property that a client was expecting to get £600,000 and move it for £645,000 we have not only covered our costs, we’ve given them more than they ever expected.
“We’ve already set up training days for all of our staff. This is when us seasoned pro’s from the days before the internet, can really start to help the younger staff understand that selling a house isn’t like selling a pair of shoes on eBay, it has to be personal, business like, sympathetic and we also need to know our sellers priority.
“We’re hoping that our new app will give sellers the confidence that we do a little bit more than just stream online and sit back and count the money.”
It’s clear from this agent that he’s not living under any false pretence. He’s accepted his market has slowed down and has accepted that you can’t always expect the market to be kind to you. He also seems clear on the direction his business will take next, that might prove critical in the long run.
I know he will be successful. But some of the 19 or 20 agents who are close to where I live? I’m not so sure. Like any industry, it seems that those who are prepared to ring the changes, will be the ones who come through it