As we enter the final months of the year, The Guild of Property Professionals is encouraging estate and letting agents to start looking at their business strategy for 2021.
Despite the recent increase in housing market activity, the organisation is encouraging agency businesses to develop a strategy for the long-term health of their business and the very real prospect that Covid-19 may be with us throughout the next year.
Iain McKenzie, CEO of The Guild of Property Professionals, said: “There is a surge of activity in the market and pipelines are looking very strong at the moment.
“However, with the high numbers of transactions in the market conveyancing is taking more time to convert. There have been reports that pipeline conversations in August were as low as 16%, improving to around 18% to 20% in September.
“In the short term, agents should continue to focus on converting pipelines into cash, which may come in very useful as we move into the first quarter of 2021.”
From a letting perspective, McKenzie points out that with the furlough scheme coming to an end, rent may become more difficult to collect.
He advised: “If you have not already done so, we would recommend providing a rent guarantee to your landlords as soon as possible. It will help both your lettings business and the landlord, so ensure that you are educating landlords about the rental guarantee products available and provide them with the option to opt-in.”
McKenzie insists that whether on the sales or letting side of the business, Guild agents should be promoting their Covid-secure-policies and displaying the measures they are taking to ensure the safety of the public.
He hopes that many of the Guild members that are following the organisation’s six-point plan for safe working are among the safest agents in the UK.
He commented: “With the current growing infection rate, people will want to work with a business that is doing the right thing and putting their customers’ safety first.
“As consumers we will avoid businesses that we don’t feel safe in, so as agents we must ensure we are doing what we can to place our clients minds as ease.”
As the financial impact of the pandemic takes its toll and unemployment levels rise, McKenzie believes that activity levels in the property market could ease in the medium term unless there is additional government intervention.
He went on: “We could potentially see the number of transactions decrease in 2021. Agents should anticipate this and estimate what impact this could have on their local market and ensure this forecast is in their projected budget for the year.
“Different regions will be impacted differently based on the influences that impact the micro-economic climate, such as being on a commuter belt or the trend of people moving out of cities for example. A local agent will understand their area and the possible influx of transactions they may expect.
“As this year has been very unusual in terms of sales volumes, agents should not look as this year as a fair indication as to what they can expect going into next year.”
To mitigate the potential decrease in transactions, McKenzie urges Guild members to review their fee strategy, as a change now would impact during 2021.
“If an agent is one of the best and safest agents in the area and has a consistent track record of providing exceptional customer service and results, now is the time to look at increasing, rather than decreasing their fees,” he said.
McKenzie adds that another thing to look at during the medium term would be cost base.
“There may have been some knee jerk reactions made at the beginning of lockdown with regard to the costs of running a business.”
He ultimately believes that good agents will prevail in the long-term
“While challenges lie ahead, there is light at the end of the tunnel and the long-term outlook looks promising for agents who are prepared and do the necessary strategic planning for the year ahead,” McKenzie added.
Comments (10)
He ultimately believes that good agents will prevail in the long-term
Lol, that isn’t news. As for ‘expert advice’ …… not impressed, nothing said that agents haven’t been doing for decades or are guild members novices!
They’ve lost the plot.
I read in one of their press releases that they are now comparing themselves to Countrywide. For what, a few pounds a month and a badge? It isn’t a franchise or a corporate.
The best line is “we could potentially see the number of transactions decrease in 2021.”
An unbiased helicopter view of the industry shows the Guild with a bigger office count, winning more instructions and selling more property. As an affinity group that enjoys the economies of scale of a true corporate agency it could be easily debated that the Guild is stronger and less vulnerable than corporate agencies.
I personally view Iain McKenzie as one of the few people who could properly and seriously be considered to take a CEO role at a corporate agency and would be one of the few who could give David and David a run for their money.
economies of scale Robert?
Are you saying they get a discount on the portals?
Unbiased view? The Guild is no more than a ‘club’.
Remember the days they would only recruit one agent within a certain mileage radius, or one per town etc? The economics dictated that if they open their little relationships more easily, they can add more agents to their glossy brochure mailing list and allow a few more agents to add a Park Lane address from which to market a two bed semi in West Bromwich or one bed starter home in Gainsborough (no offence to West Bromwich or Gainsborough by the way), to ‘catch the eye of the passing footfall’.
The Guild has no capacity to dictate to its members – if it did, then surely the tail is wagging the dog. It gives advice, and promotes its seminars in order to tow a line it preaches. But if the ‘insight’ shared by the ‘expert’ within this particular press release is anything to go by, then the agents who subscribe should perhaps begin to question its real value.
Well meaning advice but a little like The Ladybird Book on Estate Agents
Win more business!
Sell and complete that business!
Isn’t that everyone’s approach?
There’s too much nonsense spoken to make a simple, process driven business more complex than it needs to be…..
Is this what Guild members pay their subscriptions for?
Stating the blatantly ****** obvious. “In the short term, agents should continue to focus on converting pipelines into cash, which may come in very useful as we move into the first quarter of 2021.”
What next? Insights such as, to survive and to make turnover you will need to focus on gaining instructions.
The talk of protecting fee’s in the future, from an organisation who not too long ago through their alliance with easyproperty, sought to make their members more competitive, regarding fees? i.e. lowering fees to compete with the onliners and their low fees.
I’m cynical at the best of times, but this resembles sound bites for the sake of being heard.
I could not agree more… Well said
I predict many closures next year. I can see agents cashing out their pipelines and running off With the money.
We have waited 10 years for the market to return like this but it feels fake.
No one dares recruit as it could be dead again in few weeks. ( already is in our area)