The UK's estate agency landscape is witnessing a transformation, driven by the rise in popularity of the self-employed agency model. Offering a compelling blend of autonomy and flexibility with the prospect of enhanced earnings, the model is attracting more and more agents each year. The shift is also changing the competitive environment within the industry, with smaller, more agile agencies outperforming their larger rivals.
A Trend Unfolding
A recent study conducted by eXp UK throws light on the unmistakable trend: the exponential growth of small agencies. The study, which analysed the changing number of VAT and/or PAYE-registered estate agency enterprises in the UK between 2017 – 2022, revealed year-on-year growth for small agencies between 0-5 employees, boasting an impressive 12.7% growth in 2022 alone. This expansion is largely credited to the allure of self-employed estate agency firms, which have successfully expanded their ranks by appealing to a broader spectrum of agents.
Nick Carter, CEO of Harding Green observes, "We're starting to see mass adoption of the broker model. We've had more people apply to meet with us this year than we did in the last two years put together."
In contrast, larger agencies have not mirrored this growth trajectory. The number of agencies with over 500 employees has remained static, while those in other larger size brackets have seen minimal growth or even declines. This scenario underscores a shifting landscape where smaller, more agile agencies are outperforming their larger counterparts.
Why Agents Are Pivoting
The allure of the self-employed model isn't just limited to its autonomy and financial benefits; it's also a strategic move in an ever-changing property market, and agents are increasingly recognising the timeliness of making the shift.
Market Agility
Adam Day of eXp UK sees this trend as a natural evolution, driven by broader industry and economic shifts. He emphasises, “When times are difficult, the agility that comes from being self-employed, and the agency to be able to make your own decisions around mitigating negative market outlook… means you have a much greater chance of thriving and succeeding”, underscoring the ability for self-employed agents to more effectively leverage opportunities for growth and success in a challenging market.
Chris Buckler, founder of The Estate Agency, echoes this sentiment, explaining “It's so much easier to shift in a tighter market… when you've got stock that's been on with a High Street agent or an online agent for 12 weeks plus, it's actually really easy to go doorknock and build that relationship.”
Reputation Building
At its core, the self-employed model grants agents the freedom to cultivate their personal brand, enabling them to tailor their services to meet the unique needs of their clientele. "Good estate agency has always been centred around building reputation and relationships with your clients and within your local community," says Day, “It’s also a creative pursuit, one that often requires improvisation and ingenuity in decision making. When you work as one small part of a large organisation, the weight of that brand can often stifle an agent’s ability to do all these things and the best agents are starting to realise this.”
In Conclusion
The growth of the self-employed agency model is more than just a passing trend; it’s a pivotal evolution towards a more agent-centric property sector. Driven by changing market demands and the innate benefits of flexibility and direct client interaction, agents are increasingly recognising the unique opportunities this model presents. This shift towards smaller, more agile firms signals a promising future for agents ready to navigate the challenges and opportunities this model presents and bet on themselves.
