You can often tell a lot about a sector by the number of practitioners engaged in it. Competition is a healthy feature in any marketplace and strong practitioner numbers are absolutely vital if that sector is to maintain quality, innovation and an ability to offer good value for money.
As someone with very close links to the mortgage advice sector, I have watched closely the fluctuating practitioner numbers over a couple of decades and the impact this can have on consumer choice.
Overall, however, the mortgage advice market has benefited from a reduction in numbers, since a peak just before the Credit Crunch. Now down to around the 10,000 mark - but growing again - we have a leaner, fit for purpose advisory sector that is able to offer great service to borrowers.
Consumers who take mortgage advice can now expect to also have their protection, insurance and conveyancing needs catered for. Advisers are much more likely to provide a more rounded service offering now than they were back then.
For anyone interested in gauging the size of the residential estate and letting agent sector, this has been something of a finger in the air' exercise. This is why I was intrigued to see recent figures, produced through a joint exercise by Rightmove and The Property Ombudsman (TPO), on the number of individual sales and lettings offices in the UK.
The figure they arrived at - 20,000 - must presumably be right, but somewhat higher than stated elsewhere, whilst we must also take into account the growing number of online operators which could swell that number and will go a long way to giving a more comprehensive idea of the competition facing firms in this market.
The number of dual agents - offering both sales and lettings - has been estimated at 9,000, which, given the nature of the UK housing market, seems slightly less than anticipated. I say this as a business with offices across the UK offering both sales and lettings services - a proposition which (to my mind) seems something of a no-brainer given the number of households in the rental sector as a deliberate lifestyle choice, and taking in to account the anticipated growth in the private rental sector (PRS).
For a clear idea of the rise in Generation Rent' numbers, and the likelihood of the UK becoming a much more rental-focused market, take a look at the recent report by the Intermediary Mortgage Lenders Association (IMLA) issued just a few months ago. IMLA established that since 2007 the PRS has grown from 14% to 18% of all households in this country, whereas owner-occupation has dropped from 68% to 64%. There has also been a fall in social renting. It suggests that were this trend to continue, then over half all homes in the UK will be rented by 2032 - which would be the first time this had been the case for sixty years.
These trends and forecasts show the importance of the private rental sector, the landlords who facilitate it, and the tenants who will be making these properties their homes. I suspect those estate agents who are currently not involved in lettings will be studying this phenomenon and wondering at what point they should be making the move into lettings. This could result in a more competitive market for existing letting agents in future years and we can be guaranteed that the prosperity of agents is of course going to reflect UK housing market trends and a vibrant and strengthening PRS is an inevitable part of that.
The advice for letting agents must surely be to continually assess your proposition compared with your peers and competitors, as that level of competition is likely to step up a gear. Quality, consistency and transparency should be at the heart of the consumer proposition as should a willingness to be flexible. And that's before we even start to consider the importance of a brand and the consumer appetite for trusting in a known name.
*Rob Clifford is Chief Executive of CENTURY 21 UK
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