A property analytics company has devised a method of calculating the ‘best’ locations in which to work as an estate agent, in terms of potential fee income.
ResiAnalytics - a company that ghost-writes research-based marketing material for estate agents - has undertaken the calculation based on postal towns.
It has added up the total of all homes that sold in the previous 12 months in each town, then multiplied the figure by 1.5 per cent - a mid-market average, it says - and the divided the total fees available by the number of agencies with a branch in that post town. The result is a notional indicator of potential fees.
ResiAnalytics says it is aware that branches can sell homes in neighbouring postal towns but believes using this geography is broadly representative of each branch’s business.
According to the analysis, the town of Liss in Hampshire is the best place to be an estate agent.
ResiAnalytics says Liss is home to just one agency - Chaplins, a small chain with five branches across the south east - and it operates in the Liss market yielding £1.1m in commission per year, assuming the 1.5 per cent fee to be accurate.
The analysis says almost inevitably agents from neighbouring areas were also involved in selling these properties, but only this agency was actually based in the local area. “Chaplins has shrewdly managed to identify a gap in the market and grow in a beautiful part of the South Downs which offers quick commute times to London and easy access to the M25” says the analysis.
Second on the list was another area with one agent, Etchingham. Also located in the south east, Etchingham has similar qualities to Liss, including quick commutes to London. Freeman Foreman, the sole agent in the area, had potential access to £60m worth of sales within the last 12 months, equal to £914,000 in potential commission.
Clearly some pockets of prime central London may give agencies vastly more potential commission than the figures recorded by this survey - but the geographical breakdown by postal town does not allow that finer grain of analysis.
Therefore within Greater London as a whole Brentford ranks highest, placing 10th overall.
The previous 12 months has seen £390m worth of property sold in a neighbourhood resident to eight agents in Brentford. The total commission available was £5.8m, which on average means each agent had access to just over £720,000.
Mitcham was the second highest area in London, with £241m worth of property sold and £3.6m in commission available for the five agents who had branches within the local area.
“In terms of the overall pattern, there is a close relationship between hotspots and areas of natural beauty and/or motorway access. In fact, of the top 20 hotspots, 15 are either in or near an area of outstanding natural beauty, near a motorway junction or both” David Butler, chief executive and founder of ResiAnalytics told Estate Agent Today.
Butler says the apparent lack of agents competing in these areas - many of the locations have only one or a small number - could be that many of the ‘high-fee’ towns are covered by agencies which have offices congregating in a single town, like the county town for example.
“Yet if this is the case, it would seem from this analysis that many agents are missing a trick by failing to have a strong local presence in an area which is obviously hugely popular with homebuyers” says Butler.
The top 20 potential fee-earning areas according to the analysis are:
1. Liss, Hampshire: 1 agency; 12 months’ total sales value of £73,720,229; potential commission per agency of £1,105,803.
2. Etchingham, East Sussex: 1 agencies; 12 months’ total sales value of £60,984,275; potential commission per agency of £914,764.
3. Swadlincote, Derbyshire: 4 agencies; 12 months’ total sales value of £237,479,831; potential commission per agency of £890,549;
4. Welwyn, Hertfordshire: 3 agencies; £167,818,148; potential commission £839,091.
5. Warlingham, Surrey: 2 agencies; £111,659,258; potential commission £837,444.
6. Pewsey, Wiltshire: 1 agency; £54,447,182; potential commission £816,708.
7. Tadcaster, North Yorkshire: 1 agency; £50,112,606; potential commission £751,689.
8. North Ferriby, East Yorkshire: 1 agency; £49,875,769; potential commission £748,137.
9. Thatchem, Berkshire: 4 agencies; £196,158,512; potential commission £735,594.
10. Brentford, London: 8 agencies; £390,350,350; potential commission £731,907.
11. Windlesham, Surrey: 1 agency; £48,578,755; potential commission £728,681.
12. Mitcham, London: 5 agencies; £241,025,806; potential commission £723,077.
13. Bromley, London: 21 agencies; £984,265,398; potential commission £703,047.
14. South Ockenden, Essex: 3 agencies; £140,553,432; potential commission £702,767.
15. Rochdale, Greater Manchester: 4 agencies; £172,507,243; potential commission £646,902.
16. Upminster, London: 5 agencies; £208,391,800; potential commission £625,175.
17. Hockley, Essex: 4 agencies; £161,921,276; potential commission £607,205.
18. Thames Ditton, Surrey: 4 agencies; £160,306,152; potential commission £601,148.
19. Alton, Hampshire: 7 agencies; £274,411,784; potential commission £588,025.
20. Saffron Walden, Essex: 7 agencies; £272,408,225; potential commission £583,732.