An agency says individual agents operating as self-employed can earn up to £64,000 more per year than fully-employed counterparts.
Nested says the average UK agent currently earns an annual gross income of £24,096. When they successfully sell a home, the average fee of 1.5 per cent equates to £3,833 in commission although the agent individually receives only around 10 per cent of this as commission - so £383 per sale.
Nested goes on to presume that the average agent sells 30 homes per year, making an additional £11,499 and pushing gross income to £35,595. “Not much reward for a great deal of hard work” says the company.
It adds that even in London, where higher house prices and a higher average fee (1.74 per cent) mean more commission, the combined annual gross earnings from both salary and commission is £64,982.
However, the company insists that a self-employed agent selling 30 homes a year at a 1.5 per cent fee would instead pocket up to 100 per cent of sales commission amounting to a gross income of £114,991.
The company then says: “Of course, the risk of going self-employed is the fact you have no basic level of income to support you through a period of stagnant selling or in the initial months as your pipeline builds. Not only does the security blanket of a guaranteed income vanish, but you don’t have access to the database of buyers and sellers, or the marketing and operational collateral provided by your previous employer.”
A self-employed agent working with Nested would take home 50 per cent commission on the 30 homes sold in a year, it says, making an average annual gross income of £57,495 or £21,900 more than the average full-time estate agent employee, despite no basic salary. In London, a Nested agent would apparently earn £129,110 in gross commission versus the £64,982 earned by the average agent in full-time employment - a £64,218 boost to their annual income.
Nested recently announced that it would spend a new investment of around £5m on attracting new self-employed agents operating under its brand name across the country.
Head of commercial at Nested, Alice Bullard, says: “The UK property market can prove a very lucrative place for employees with the desire to achieve within the estate agency sector. But it takes an extremely driven, motivated individual to make it happen, and even then, the reward is just a fraction of the financial spoils generated from your hard work.
“So it’s hardly surprising that more and more good agents are switching to the self-employed model, not only to increase their income, but to build their own personal brands and receive the recognition they deserve.
“It’s certainly not for everyone, particularly if you’re happy to sit back and simply fill your quota.”