Estate agents in the UK – who are reportedly among the worst paid in the world – could improve their earning potential by embracing disruptive business models, according to Agent & Homes.
The fast-growing agency, based in London, says that a more modern approach to estate agency could reverse the trend of businesses closing and help them to become more profitable.
UK agents among the lowest paid globally
Recent research from Yell Business ranked the UK 24th out of 25 countries when looking at the average earnings for real estate jobs across the globe.
Taking into account annual salary and the cost of living, agents working in the UK were estimated to have an average take home of £19,843 – only higher than the £18,845 recorded in New Zealand.
Meanwhile, the typical annual earnings of agents in other locations such as Saudi Arabia (£62,931), China (£55,481) and Brazil (£44,482) dwarfed those of property professionals operating in the UK.
In recent years, it’s been well-documented that the typical estate agency commission fee in the UK has fallen significantly. GetAgent estimated that it fell to an average of 1.2% during 2019.
Eroded fees could be down to increased competition – particularly from online competitors – and low public trust and expectations in the industry.
Current agency model diminishes earning potential
According to Agent & Homes, a combination of factors means that the traditional estate agency model in the UK stifles earning potential for agents.
“High street offices cost a lot and that inevitably has an impact on agents’ salaries – particularly those not operating in the most senior positions,” explains Rollo Miles, co-founder at Agent & Homes.
“What’s more, the commission structure in which the company receives the selling fee from which the agent receives a small cut is limiting and does not provide the incentive to be a top performer.”
Agent & Homes’ other co-founder, Bob Crowley, argues that an over-supply of high street agencies is having a negative effect on average fees.
“High street agents have created this situation of low-salaried staff by expanding in the same geographical areas to such a degree that the number of high street agents simply outweighs the needs of the consumer.”
“Sitting around in a high street office all day is energy-sapping. A happy agent is a productive agent. The agents should be able to dictate their own time and how they expend their energies. They should be able to choose when and where they want to work to fit in with the modern consumer,” says Crowley.
How can a fresh approach help agents to earn more?
The main benefit of agents who embrace more flexible business models is that they can earn higher commission fees and ultimately take home a higher wage packet each year.
“Property professionals who work for agencies like ours do not have their commission eaten up by a large brand that has to pay for expensive high street offices and other overheads,” says Miles.
“What’s more, agents with a more flexible pattern who manage their own workload will be more motivated, have higher productivity levels and therefore increase their chances of producing better results.”
Crowley adds that the problems with low fees and high workloads are present at every level of estate agency.
“It is obvious that a firm like Agent & Homes, paying up to 80% commission, is going to prove attractive to seasoned performers who are being treated appallingly by champagne-quaffing suits at head office.”
Miles adds that a flexible model allows agents to focus on selling and letting homes with no need to tick boxes for corporate satisfaction. This, he says, provides them with additional time to spend on fostering long-term and meaningful relationships with their clients.
“This combination of reasons is why opting to work for a dynamic new agency like Agent & Homes could see the average agent earning a lot more money each month, while also being happier in their career,” says Crowley.
“Our top performer earned well over £200,000 last year,” he concludes.