There is a lot of discussion in the industry right now about what the future holds for traditional High Street estate agents.
Those of us at the coalface are having to think long and hard about what our businesses will look like post-coronavirus, having had to take some incredibly tough decisions that no-one could have foreseen just a few months ago.
It is extremely distressing for any business having to lay off or furlough staff – and we are no exception.
We recognise the hardship of individuals impacted across the industry, including those who are self-employed that don’t meet the criteria for Government support.
I feel it is time for an honest conversation and wish to contribute my own thoughts to the industry debate that is taking place.
Inevitably, the forced closure of estate agencies due to coronavirus is making ALL agents think hard about their future.
I’ve spoken to many agents who are re-mortgaging or bridging to make ends meet; it is going to be tough, especially as many businesses go bust coming out of a downturn, not going in!
Unfortunately, for some, it’s too late as the distressed business signs are already up, judging by the number of insolvency practitioners that have contacted me to purchase those businesses.
We’ve not seen the full fallout yet.
How will agents that are carrying huge debt, such as Countrywide, Leaders/Romans and Foxtons, all get through this unprecedented situation we all find ourselves in?
Will High Streets be deserted?
Everyone is looking to reduce costs and inevitably this means not renewing expensive High Street leases.
With so many retail businesses going into administration or shutting shops and food chains staring into the abyss, combined with people’s ever-increasing online and out-of-town shopping habits, the days of the High Street as we know it are surely numbered.
Has the ‘High Street pull’ for estate agents already vanished in some locations?
Are they now just becoming leisure zones?
If coronavirus continues to plague us, customers will shy away from personal contact and increasingly the British public will expect to trade fully with their local agent online.
Is that now becoming our new High Street?
If so, the model must be financially viable – you cannot do it for nothing to get market share or rely on shareholders to prop you up.
Super Hubs covering a 25 to 50-mile radius, supported by ‘Spoke’ branches, will do away with so many expensive High Street leases.
Will homeworking be the new norm?
In the days before the lockdown, our sales and lettings staff working from home made 18% more outbound calls than when they were in branch.
This proves that people can be very effective and more productive working from home, although we recognise that some find it lonely or more challenging with family around.
For many though, this has proved to bring a better work-life balance
Are flexible contracts the way forward where hours worked are down to staff who are trusted to deliver the workload?
They would remain employed and can earn good money with all the associated benefits, not be self-employed with all the associate risks. Is this the future?
Will agents become all-rounders – listing and selling?
Our own purpose-built technology certainly makes this so much easier.
Our discussions, inevitably, are revolving around ‘people’ and how we attract and retain the best, as we believe our industry will still need ‘Brilliant People Powered by Tech’.
As for Rightmove, in my opinion they appear to have wounded themselves with poor PR and not recognising the angst the industry has about them.
I imagine they will come out of this much weaker with swathes of Agents leaving the portals altogether or choosing better value portals.
Has Zoom led a transformational shift?
Zoom has been a godsend since the lockdown and we’re now using it in so many ways, not least to conduct valuations and online viewings as part of our new ‘Off Market’ service.
We are also using it to have sale meetings with over 100 people at a time, it’s made coaching and training so much easier – and we’re even using it to hold awards evenings.
Even at induction, sending everyone to a hotel for a week is no longer required, so our business is going to change drastically, hopefully for the better.
New viewing technologies and a Zoom valuation model must now be on the cards too.
We had a record number of valuation requests in January.
How many more could we have done if we could have done some virtually as a first ‘getting to know you’ valuation/market appraisal?’
We’re also looking at a new Partnership model and have identified 62 new locations where we would like to set up one of our new Partnerships.
Local knowledge, local contacts and consistent social media marketing will be the traits of the most successful in our industry, backed up by brilliant tech.
Video and 5-star reviews will be the generators of the most new business.
I also think a local monthly market update podcast will be a must going forward.
Your name will need to be everywhere… people will still buy people not brands.
The portals will become less important and no longer our umbilical cord.
It’s all about change.
The one thing I do know is that if you are a good estate agent now, your future is guaranteed, albeit in a new model.
Business as usual, just not the same.
Paul Smith is CEO of independent estate agency chain Spicerhaart
Comments (22)
Every time Mr Smith sits and writes another “vision”, it just makes me laugh. Especially when I look over at their horrendously expensive high street office, with drab old furniture and flaking paint. Shambles !. Their defence (or survival) is to then go out and charge elderly vendors 125% more than the market rate in fees, unbeknown to the vendor of course, but they were sold on how great “flink” is??. Shocking business, shocking ethos, no real values and one I have my money on for future closures soon.
After 15 years in a High profile location in the centre of town I moved to an edge of town location 4 years ago. For the same rent I doubled my space and gained valuable parking. I also made a five figure saving on business rates.
I think a visible presence is still an absolute must however, town centre rents and rates are now completely deranged and will need to be reduced by half before small independent businesses such as mine return. Given how much of our dealings with the public are now via email, FaceTime and text message I think he makes a valid point.
Paul Smith is dealing with exactly the same issues as the rest of us, just on a much larger scale.
Coronavirus came at a bad time for agents that were struggling to survive for a number of reasons before the pandemic. Each year there has always been agents closing and another opens up. But for those that were struggling, has probably finished them off sooner than later?
What high street agents have had to struggle with in recent years is increasing costs (eg RightMove and salaries) and fighting off on-line only disruptors, who were nothing more than that. Messed up the housing market and just about all have gone into liquidation after only being able to achieve less than 5% in total of the market. Some agents cut their throats trying to save a minimal amount of lost business, to these disruptors 5% share of the market.
The high street agent will never die and any agent who considers doing self employed staff or employees working from home have one very big issue. Can you trust them to be just as effective out of sight? Considering the number of years I travelled around agents offices in the UK, the biggest problem was lack of managements control of staff within the office … now you wish to exasperate the problem? There will be many agents you can think of some staff the hat will fit or be worried about. Yes there are some excellent staff but is that because you have hands on control? I don’t know how many times over the years I have said this …
You are the one in control of your destiny and once you abandoned that to others or ghosts, you are playing a very fine tight rope to your survival.
The High Street Agent has not been replaced by technology and shouldn’t be afraid to integrate it as long as it assists, not replaces. It has been proven that 95% of your customers want you in the High Street and it doesn’t matter how big you are, it is the staff and management that matters. All that will happen is High Streets around the country will become smaller size.
Our offices have been closed to the public – however, having local premises has been invaluable over this period. Keys have been dropped off and collected for gas safety certificates to be carried out and other maintenance issues have been dealt with in a sensible way to ensure our tenants are safe and we are still providing a service to our landlords. No public just turning up – just gas engineers and contractors and safe members of staff attending when required.
Imagine trying to organise all of this is you are a bedroom agent!
Pointless negative article. If people genuinely can’t see the benefits of high street offices then they are either stupid or pushing another agenda.
Personally, this has highlighted the fact that I definitely DO need to keep my high street offices. Trying to keep the business going by using zoom or the like fills me with horror. Yes, they are good for the time being to keep in touch but I need to see my staff and make sure they are all under one roof competing with each other and showing me theyre working. Once you’ve finished a zoom call with your staff who’s to say what happens for the next couple of hours. They could, and probably are, going straight to their favourite box set. Once you check in again on zoom its all. “I tried Mr & Mrs Smith but there was no answer” etc etc.
So, no, for me its definitely better for business keeping all your staff under one roof where you can properly monitor productivity. The sooner the better.
Paul and dad Alex have been, are and I guess will continue to strive to be successful EA businessmen! I have to smile at the minute by minute advice offered up by a multitude of EA Gurus etc.etc. on media outlets to EAs these days, most of which, in my opinion, have their own biz reasons at heart. All I would add is, be aware of what others are doing (rather than what they are saying), take it all with a pinch of salt, be yourself/individual, turn left when others turn right where you can envisage a gain and get your head down and “Just do it” i.e. make your own biz plan, occasionally change it but stick to your overall goal.
From the man who sacked 300 people moments before the furlough scheme was introduced that day… bravo sir!
Honestly, you have some brass – PIE, take note from the comments, no one wants to hear from the Piers Morgan of Estate Agency.
He’s definitely decisive but that’s probably why Spicerhaart came through 2008 without any debts. Whilst that decision obviously wasn’t popular they’re probably the same decisions that others will be forced into making before long.
A Government that can’t even get us to a stage where we can get a haircut
Makes a lot of sense to me, if the market was back I’m pretty sure we could work in a very similar way to Paul has said. As someone running 4 branches, all within a 30 mile(ish) radius, I’ve got to look at my costs and try to get them down – we’ve proved that we don’t really need buildings to be good agents. Facetime etc. has been a godsend to me and I don’t think some of the high streets we’re in will recover for a long time.
It’s about trust. I have a good team that could work from home and I believe that they’ll do what’s needed to be a success.
Paul Smith taking pop at other agents when he has been one of the worst in the industry handling this crisis.
The gaul he has to even come on here is staggering.
Standard message from Mr Smith about how wonderful he is and the great tech he’s invested in recently.
Why he thinks it’s ok to point out a handful of competitors in a negative way at this moment in time is beyond me, it just goes to show how he thinks and acts and really doesn’t care about anyone or anything aside from himself even when people are worried about losing their job’s and homes.
Shame on you Mr Smith
Completely agree with this – Mr Smith using distraction tactics and sleight-of-hand shamelessly.
Paul Smith is doing what businesses need to do in order to survive the next few years. Don’t agree in the way he has executed it though.
Good estate agents will survive and WILL remain on the High Street.
The ones that can’t really afford a team or to be on the High Street will start banging the online and Zoom meeting drum to divert attention.
It seems to me the 63 locations for partnership are probably the offices he was planning on closing – these will probably be turned into some kind of franchise setups.
This is very simply a business by business decision , many offices won’t re open due to cash flow issues just as much as logistical ones . Flexible working and non high street offices are very attractive but if the high street empties then being on it could be a useful USP.
The large groups have very different logistical challenges to the more nimble Independent agencies.
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What is becoming obvious is local expertise is paramount regardless of workspace or employment type , popular skilled local personalities will thrive in my view .
The higher turnover of staff experienced by some larger agencies means having high calibre local personalities is not logistically possible without huge changes to attract , retain and develop top talent . The bigger companies are really up against it.
Strong leadership and brave decision making are crucial factors in who will get through this and who won’t . The best leaders build the best teams and above all else the best teams will always win through.
Correct me if I’m wrong, but Boris has given the green light for viewings and valuations if we are sensible I.e wearing the correct protective gear and keep our distance? virtual viewings are good but can not fulfil a proper look round for a buyer or tenant. I think if the property is empty we and we are sensible we can start getting back to it. if the vendors/ landlords/ tenantsare there extra pre cautions need to take place?
your thoughts would be good to know guys and girls.
Guidance was not at all clear last night.
Apparently 50 page report coming out today.
Each industry has its own requirements and need for clarity.
Need to wait for the 50 page detail guidelines, you still can’t visit a friend or relatives house … therefore you def can’t visit a strangers, don’t jump the gun, someone will report you and you will get a big fine, lets all wait till later today for the detail.
You can’t do a drive by and or a physical valuations from home. So I take it as green we can we can start and I will start. Following all social distancing guidelines etc etc.
Personally I would wait for the report today at 2. Few more hours to hopefully get some certainty.
Why generate and publish such a negative article? Is there any need ?
Considering he bought many agents in financial difficulty!