A booming year in the property market should have worked wonders for the bottom line, but for many the opposite proved to be true; highlighting the need for many to reassess their fee structure across 2022 and beyond – according to the latest research from tmgroup, mio and Conveyancing Data Services (CDS).
Available to download now, ‘The New Normal’ report – bringing together the voices of nearly 800 property professionals – revealed stark contrasts between those citing ‘reduced fees/ profitability’ and ‘increased fees/ profitability’, when reviewing how 2021 impacted their business.
The findings clearly showed that Estate Agents came off worst, as Nick Ball, Sales Director – mio comments:
“It’s not surprising to see Estate Agents citing reduced fees and profitability as having a critical impact on their businesses; Estate Agents worked incredibly hard and sadly didn’t have much to show for it. In part, because they were a victim of the delays across the transaction, preventing them from turning their pipelines as frequently as they’d otherwise like to. That’s not all, Estate Agents also had to deal with added stress and frustrations from home movers – resulting in them spending more time (and money) per transaction to support the customer experience. Added to that, lack of stock in the wake of the Stamp Duty holiday had a knock-on effect on agent’s fees too, as many engaged in a ‘race to the bottom’ to try and grab as much market share as possible. Overall, it was a hard time for the bottom line.”
By contrast, more conveyancers seemed to have finally recognised their worth and held their prices high, as Matt Joy, Sales and Marketing Director – tmgroup comments:
“2021 heralded a perfect storm of too much work and not enough people to do it – a situation only exacerbated by the Stamp Duty holiday extension. What’s been especially promising to see however is several firms recognising their worth and raising their prices in response – with 17% citing increased fees vs. just 3% citing reduced fees. Hopefully this will continue to feature prominently in strategy planning and we’ll see a step away from the traditional ‘race to the bottom’.”
This is particularly pertinent given that mio’s research of over 300 homemovers revealed that only 11% chose the conveyancer who offered the lowest fee – compared to a staggering 89% who didn’t.
The property market faced an unprecedentedly busy period – with clear winners and losers – as Joe Pepper, CEO at tmgroup concludes:
“Businesses that invested in their staff, technology and even raised their fees fared rather well overall. Whereas the picture is comparatively bleak for those who lost sight of the bottom line and struggled to retain their staff. Hopefully lessons have been learnt all round.”Want to find out more? Download your FREE copy of ‘The New Normal’ here. A ‘first look’ at the report was also discussed at a tm:tv special. Watch the recording here.