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By Nat Daniels

CEO, Angels Media


OTHER FEATURES

Property Natter – has Purplebricks dealt a fatal blow to the self-employed model?

One of the biggest trends since Covid, in the property world and elsewhere, has been a shift towards more hybrid, flexible models of working.

Some agents working at major corporates have taken the plunge and branched out on their own, while others have opted for the self-employed route to give themselves more freedom, autonomy and flexibility.

However, earlier this week, one of the major proponents of the self-employed model of agency – Purplebricks – announced that it was ending its self-employed Local Property Experts operation and moving instead to ‘a fully employed model for its field sales agents’.

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As our newsflash story on Tuesday said, Purplebricks – which has been back in the news in a big way in recent months, with various announcements and launches - has long prided itself on LPEs being self-employed, and waged many battles with critics arguing that the self-employed status could not survive.

In fact, as recently as last month, chief executive Vic Darvey told EAT that LPEs in their self-employed form were to be the backbone of a new emphasis on ‘localness’ in a marketing blitz this autumn.

That, however, all changed on Tuesday when the news of the ending of the self-employed model came like a bolt from the blue. The agency with the eye-catching purple branding currently has some 600 LPEs, but Darvey has admitted that some of these existing agents may be lost in the transition. However, the company is confident those lost can be replaced by other agents willing to buy into Purplebricks 2.0.

Purplebricks built its reputation off being different to other agencies, but the latest move suggests much more of a shift towards traditional agency, even if the fees and lack of a high street presence continue to be a differentiator.

While eXp UK, Century 21 UK, Yopa, Agent & Homes and Keller Williams UK are others who have been pushing the virtues of a self-employed or flexible version of agency, none of these have the size, brand recognition or high profile that Purplebricks – for all its critics – undoubtedly has.

So does this news spell the beginning of the end for the self-employed version of agency, or will the continued shift in priorities brought about by Covid still push a decent chunk of agencies down this route?

The latest figures from a report by the thinktank Centre for Cities suggest there has been no shift back to the office despite the lifting of all Covid restrictions on July 19. Despite efforts by government and others to encourage people back, fewer than one in five people working in cities across the UK had returned to the office by the end of July.

The report said worker footfall in 30 big cities stood at an average of only 18% of pre-pandemic levels in the immediate aftermath of the majority of Covid laws being scrapped in England. In London, only 15% of workers had returned to their offices by the end of July this year.

Where footfall was up on high streets, this was mostly in popular seaside resorts or tourist hotbeds like Brighton, Blackpool, Bournemouth, York and Southend.

The research also found that daytime worker footfall dropped by 1% in the final week of July compared with the previous seven days, and on average was running at barely half the levels seen pre-Covid.

You might assume that lower footfall in towns and cities would encourage more agencies away from the high street, but in truth footfall had been down well before Covid and this hadn’t discouraged agents from having a visible high street presence with an office.

While people might no longer pop in to their local estate agents as much, they do still provide a clear marker of an agency’s presence, and can be very useful from a brand awareness point of view and making a business feel more a part of a community.

There had been a shift in recent years towards more hub offices being set up – to give agencies a central structure, but off the high street where rates are lower – but this momentum seems to have stalled a bit recently.

Agents, too, are a little bit different from most professions in being more likely to return to the workplace than the average office worker, because certain aspects of the job can be performed more easily there. While the majority of agents coped admirably with the need to work remotely during the worst months of the pandemic, and some have embraced WFH or a hybrid model on a permanent basis, many agents have been back in the office on a part-time or full-time basis for quite some time now.

The appeal of working from home might be less for agents – who work in quite a customer-facing role – than other traditionally office-based jobs which people have realised they can do perfectly well from anywhere with a laptop and a decent internet connection.

The self-employed route, while potentially very rewarding, does also come with more potential risks and downsides, which may be why it has remained fairly niche until now – with its expansion driven by digital-heavy disrupters like Purplebricks and Yopa and agencies with an American influence such as eXp, Keller and Century 21. In the US, the agent is the brand, whereas in the UK the brand itself typically brings in the customers, with agents working under this banner.

Staying out on their own

Despite the shock move by Purplebricks, it seems certain that a portion of its LPEs will choose to remain self-employed – the very thing that drew them to the agency in the first place.

And one opportunistic Midlands’ operation has already been attempting to woo self-employed agents working for Purplebricks who want to resist the instruction to become fully employed and keep more autonomy for themselves.

James Forrester, managing director of Birmingham and Lichfield-based estate agency Barrows and Forrester, has implored frustrated agents to come over to his company instead.

“The unsuspecting LPEs that have entrusted Purplebricks with their careers will be smarting this week at the changes that are being enforced and their implications,” he said earlier this week.

He said it was quite the about-turn from the enthusiasm ‘Purplebricks 1.0’ had for the benefits of their agencies not being formally employed in the traditional way, but nevertheless offered LPEs an escape route.

“If you currently work a West Midlands patch, come and talk to me. I’ll partner with you on a similar basis to PurpleBricks. No messing and in confidence,” he said. “I won’t let you down as you just have been.”

It seems likely that others such as eXp, Century 21, Keller and Yopa will use the disruption caused by the transition – and the frustration some LPEs have at potentially losing their self-employed status – to attempt to grow their own operations.

While Purplebricks more than likely has the clout and resources to convince most of its existing LPEs to stay with it into the brave new world of fully employed agency, it will be interesting to see how this all plays out and just how much of a backlash it faces.

It has never been afraid to take risks or upset the apple cart before, but there will be those who wonder whether PB is now just one step away from becoming like any other traditional major UK agency. Has it now lost what made it more unique, even if that uniqueness has regularly split opinion?

As for the self-employed model, it seems certain that it will continue to exist in some format, but there’s no doubt that it’s been dealt a blow by the news which broke earlier this week, with the poster company for that way of working now appearing to have had a change of heart.

It will be fascinating to see how this all plays out as the transition takes place.

Until next time...

*Nat Daniels is CEO of Angels Media, publishers of Estate Agent Today and Letting Agent Today. Follow him on Twitter @NatDaniels.

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    Was this really Purple Bricks idea? Far more likely that they had a tap on the shoulder from HMRC to remind them that anyone working primarily for one employer has to be PAYE, not self employed.
    Quite simply it is a law that PB, and several others in the industry, have conveniently ignored.
    T

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    As Allan says, this is much more a case of having to go down this route than a choice. IR35 dictates that any business with a turnover of + £10million or a balance sheet of over £5million and with 50+ employees triggers IR35. The rate they have grown at would suggest that this has now happened. The added costs to PB will be immense.
    However, the other brands mentioned in the article are working within the law, as under the Small Business Exemption ruing for IR35 they are compliant and allowed to continue running their operations in this way. The SE model and the growing amount of smaller operation adopting this way of working with associates/personal agents or whatever else the title may be will continue to flourish.

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