Even before COVID-19 changed the World as we know it, if you were to walk down any High Street in the UK, you’d expect to see a few things: A Pret, a charity shop, a £1 store (actually, probably a few of these) and of course…an Estate Agent.
High Street Estate Agents are part of our culture. As a Nation we are obsessed with property. Everyone will have dealt with Estate Agents in their lives as they help the British public buy/sell or rent property. They are a familiar sight, with their typically plush offices, smartly dressed agents and shiny mini-coopers ready to whizz you off to viewings. And whether you like them or not, lets face it, we all like browsing the adverts in their store windows.
But alas, I fear we may not see the traditional UK High Street Agent for much longer. And whilst COVID-19 may prove to be the final nail in the coffin, their business model has been in decline for quite some time.
Here’s 3 reasons why….
1) High Street Woes
Growing up, a trip to the High Street was a real treat. Shops, cafes, buzzing atmosphere. You name it, the High Street provided it.
Anyone experienced that recently? Nope, didn’t think so. Every second shop is now boarded up. They resemble ghost towns, a place you quickly hurry through on your way home from work for fear of someone seeing you there. Oh the embarrassment. Why shop on the High Street when Amazon can deliver something right to your door which is cheaper, better quality and in less time than in takes to make a cup of tea?
“Last year 284 independent high street estate agents closed their doors, making it the sector with the highest number of closures followed by newsagents, women’s clothing, fashion, delis and hairdressers.”
Well spare a thought for the endangered High Street Estate Agent, who’s home is well and truly stuck on the High Street. Locked in to paying high rents to secure the most impressive spot on a deserted street. When it comes to Business, we’ve all heard the phase “Location, Location, Location”. Well for the High Street Agent, Location was once their key selling point. Its now their nemesis.
2) Technology
Technology is great. We all use it. We all benefit from it. We are all probably negatively impacted by it (ever found yourself mindlessly scrolling through Facebook feeds?). And the property industry has certainly not escaped the Technological evolution. Let me focus on two key areas impacting High Street Estate Agents – for both I don’t even need to explain why these Tech changes are driving High Street Estate Agents out of business:
- Online searching. If you want to move house (buying or renting), do you a) wander up and down the high street in the rain trying to find an estate agent window to look in, or b) jump onto Rightmove, add your search criteria and find suitable properties in a matter of minutes? (HINT: Tick the second box).
- Online competition. SPOILER ALERT. You can now buy/sell or rent property entirely online. There is no longer a need to use a High Street Agent! A whole host of online estate agents have popped up (Howsy, OpenRent, Makeurmove to name a few). These can provide all the services a traditional High Street Estate Agent can offer (yes, even viewings) at a fraction of the price. You can even tailor your package to pick the exact services you want. Please read to the end of this post before you jump over to google to signup with these online agents!
3) Lower Revenue
Imagine any Business being told by the government that they are now no longer able to charge a significant chunk of their fees to customers. That’s what the tenant fee ban did last year to Estate agents. No more tenant admin fees, or contract fees, or referencing fees or any of the other fees they used to gleefully skim off tenants. How did Estate Agents react? Well some of these lost tenant fees they pushed to Landlords (don’t get me started!), but reality is, they have just had to accept reduced Revenues. That’s a bummer.
The list of nails could go on: Arguably, and in my experience, their service offering has gone down (I’ll save that for another post). A whole host of new Tax & Regulations in the property industry have made Business conditions more challenging and there’s even this thing called Brexit which everyone has forgotten about these last few weeks (can’t believe I got to this stage of the post without mentioning it) – all of which are nails that are firmly closing that coffin lid. But by now I think you’ve got the point.
So let’s jump to the humanitarian and economic crisis that is COVID-19, where Government enforced Lockdown and social distancing rules means no property sales, rentals or even viewings. Yes, Government financial support can hopefully cover furloughed staff costs and provide loans to keep High Street Estate Agents afloat for a few months. But its fair to say that losses and financial hardship for Estate Agents are inevitable over these coming months. Add this to their pre-COVID-19 challenges/struggles, and I simply can’t see many surviving this latest setback.
But wait, let’s not leave it on such a negative note. Is there a glimmer of hope for the High Street Agent? I believe there is. In fact, some (not all) could even stand to gain from the numerous challenges I’ve set out above. Who? How is this possible I hear you say? Stay tuned…I’ll be posting a High Street Estate Agent survival plan to this blog soon 🙂
Stay home. Stay safe!
Louis