A business billing itself as the ‘next generation letting agent’ is launching a franchise operation before going live to landlords and tenants next month.
Purplebricks-style Accommodation.co.uk is recruiting local lettings experts and will shortly be launching a platform which it says will streamline and automate most admin tasks. It has set out its ambition to be the “largest and best loved letting agency in the UK”.
The initial franchisees – to be called Local Lettings Consultants – will pay nothing.
A price of £1,000 will apply before the end of the year, with a price rise early next year.
The firm says this has yet to be confirmed but that it will be “extremely affordable compared to traditional letting agent franchise fees”.
On an ongoing basis, Local Lettings Consultants will pay a minimum £100 per month to Accommodation or 5% of revenue, whichever is greater.
The firm is looking to recruit franchisees in 12 areas by the end of this year, but says the number could easily be greater.
Accommodation says that franchisees will be able to set up without the barriers that come with traditional letting agent franchises, such as a high initial payment and additional set-up costs.
Franchisees will get training and marketing support, while a central property management team based at the company’s Manchester support centre will handle day to day property management duties.
Landlords can choose between let-only and full management with charges from 4%. Properties will be advertised on Rightmove, Zoopla, Facebook and SpareRoom. Renters choose from ‘curated’ properties, which will have been individually inspected.
The business model, with its local self-employed agents on the ground, is similar to that of Purplebricks but as a franchise operation is probably more directly comparable with EweMove.
Clive Tomlinson, former business development manager at Belvoir and now performing the same role for Accommodation, said: “A lot of talented, ambitious lettings professionals are facing immense difficulty in the face of mass closures of traditional letting agents.
“We’re offering a highly competitive start-up fee to empower experts to set up their own business while still benefiting from Accommodation’s expertise, training and resources.
“The majority of time-consuming administrative tasks will be handled by the platform, freeing up our franchisees to concentrate on delivering a great experience for landlords and tenants alike.
“We’re an ambitious company and we’re excited to work with our franchisees as we grow across the UK to improve renting for everyone.
“By sharing the power of proptech with our Local Lettings Consultants, we’ll enable them to focus on what they’re good at and what really matters to landlords and tenants.
“By enabling our lettings consultants to work remotely with the full backing of our central team, we’re able to keep outgoings low and earnings high – something that traditional lettings agents simply can’t do.”
The firm, an ARLA member, was founded last year by Aaron Short, 24, and Matthew Meekins, 23, who met at Lincoln University, and has the backing of ex-Dyson director John Lomas, 58.
The company says it plans to create 50 new jobs in the next three years.
Short said: “We’ve already had an overwhelming response from property professionals who are looking to set up a franchise, with several already undergoing training.”
Comments (16)
Joining this conversation as although, as pointed out, the management fee for this doesn’t seem to be 4% it can be done at that rate, we (and not going to publicise as just wanted to discuss) do exactly that, my background is 15+ years in management and after 2 years of testing inhouse we launched a stand alone company that charges 4%, now it is only an outsourced white labelled model for the industry not individual landlords and there are a couple of caveats re the pricing which are all on our website with main one being £395 min. In London, South East/Home Counties, Central Midlands, M6 corridor it is a true 4%.We had to change our thinking as it is a volume game and margins are tight but with state of the art internal tech to automate recurring tasks we have been able to do it and have just signed a major US/Japanese Asset Manager to be their provider in UK
For those who are attempting to be a know it all by criticising the mention 4% missed the word before, ‘FROM’. I checked out the website. The let fee is 4% of the annual pcm. The management fee is 10% and there seems to be a discount for landlords with multiple properties. You’re Welcome
Non-viable from the off at 4%. Clearly someone doesn’t understand the costs and has no growth potential for any sensible investor to get involved. The only people who are going to make any money (if any) are those creaming the top layer while the troops run around like headless chickens. Lettings is costly and labour intensive to be done right.
As usual paper numbers to make a quick buck. They are not offering anything new in service and reckon they can do it with less effort. Watch this space we will be hearing about them soon … regrettably the fall out they risk making!
Any landlord considering their services want to consider a claw-back and liability clause in any agreement, they may just wish they had.
Lettings is a complex business but does not have to be costly.
I own a large management company and we don’t charge the earth.
I’d never get away with charging as little as 4% though. There is just no margin. Some agents charging a month’s rent is a complete joke though. It’s only cost heavy if the agent is useless and doesn’t have the right systems in place.
Good luck to them but I think this one is destined for the skip, just like purplebricks and the others that have already disappeared.
Lettings is a complex and fast changing business. I can’t get my head round this really. Surely those already experienced in Lettings won’t be able to manage with fees as low as 4%. Those not experienced will need to be fairly quickly and it doesn’t come cheap. The legislation is a minefield and you have be on the ball and provide a personal and time consuming service. Some of my landlords are experienced enough to use our let only service and most of the rest want us to everything for them. There are a few inbetweeners who pay 7% and sort their own maintenance. We wouldn’t make enough profit if we had fees from 4% so not sure it’s a viable option. Unless the plan is to charge very high set up fees and increase the management fees over time.
Ive been in this industry for over 10 years and have recently set up a new Lettings and property management company.
It is incredibly hard to make it work.
Fees as low as 4% let only is a business killer.
I couldn’t manage that at all. Our fixed price managed service is the most popular together with the bolt on service. Landlords like choice and accessibility.
Its nothing to do with fees really. They don’t like being ripped off for excessive management costs though.
I’d suggest these guys walk before they run.
I have spoken to the head of recruitment there who I believe was a director at purple Bricks previously and it sounds like a smart model. I’m thinking about joining them myself.
I have been involved in Lettings for over ten years and I think it’s the way forward for lettings especially with how the sales market is going.
Speak to them and see how they work before jumping on them.
Good luck to them, we should be positive about young entrepreneurs starting businesses.
From experience, lettings isn’t something to be taken lightly and certainly isn’t something you can do cheaply. Following the recent recommendations to the government regarding mandatory qualifications and licencing, the lettings business is set to change quite dramatically and it much more likely to encourage higher fees with well trained staff and proper landlords – lettings will become a serious profession that you can’t simply just fall into.
Sounds like a scam. They’re not on Rightmove now… Why would anyone trust these two 23yr olds?
So you’ll need huge numbers of landlords as the fees are so small to make this stack up. Those landlords will be those who focus on price solely. These are the people we are culling from our business because bizarrrely those that pay the least still think they deserve nothing but the best. Good luck to whoever goes with this business. It just seems like a miserable working environment?
Short said: “We’ve already had an overwhelming response from property professionals who are looking to set up a franchise, with several already undergoing training.”.
Experienced agents have battened down the hatches and are riding out the storm as it is – this is not the time to be entering the business of lettings. TPFG got a bit of a mauling last week for depriving inexperienced investors of their retirement funds – what’s the difference here?
Yes indeed not just retirement pensions only for the truly brave .
Even when the soon to be leaving Ian Wilson with a few amusing anecdotes attempting to varnish the staggering franchisee losses the other week the very same day Ewemove Newmarket bit the dust after 12 months
Where is the fianncial help in a challenging market?.
The Head Shepherd even had the brass neck and a distinct lack of empathy to hide the tragic failures .increasing deficits, annual creditors ,the financial charges and dissolved companies by saying
“You can’t ascertain the cashflow or profitability of a business from micro company accounts on companies house. To do so is misleading, does not take account of directors loans, dividend payments or any other financials that would benefit the business owner and certainly does not reveal their personal tax situation and how their accountant suggests they manage their business and drawings.”
Only last week the franchisee’s company Ewemove Cheltenham & Bishop’s Cleeve Ltd although still showing as trading on Ewemove’s website the company was dissolved on the 20th August after failing to submit accounts according to Companies House
To clarify – I was drawing a bit of a comparison, not opening that can of worms. 🙂
Appreciate that but the lid of Pandora’s Box yet to shut !!! Forewarned is forearmed to prospectiuve franchisees as they get ushered in to these ventures without adequate financial support .Its clear who the winners are ! at their expense!!!!
Game changing!
4% is simply not enough income to manage a property effectively. Centralised management teams don’t work all that well either, too much of a disconnect between teams and the client.
Wouldn’t touch lettings in England with a barge pole. Certainly not until it becomes more landlord friendly anyway. There are better returns investing outside the UK and less headaches.