However, as businesses are opening up workplaces again, there are signs that people want to move back towards cities and industrial centres. It’s too early to tell right now whether this is going to become a more sustained trend, or if the popularity of suburban properties is going to endure.
City-based agents are seeing the rental market pick up again after temporary rules on eviction notices have been rescinded.
One thing is clear as we hopefully are now emerging from the pandemic; it’s important for agents to adapt and become more resilient in a variable market.
The end of the stamp duty holiday
The stamp duty changes have impacted the market hugely over the course of the pandemic, with a record number of transactions taking place for many agents. However, now the financial cushion has been removed the market is shifting once again, the rush to buy before the deadline brought things back to normal in October.
What this does mean is that first-time buyers in 2022 will need to have deeper pockets. After a year of booming prices across the UK and changes in the types of properties being bought and sold, experts suggest that house prices will rise by 3 and 5%.
We are also in for a change in the type of buyer, with fewer existing buyers and people moving home or buying additional properties, and more people with smaller budgets making their first steps on the property ladder.
A landlord shortage
Profitably owning properties is becoming more difficult thanks to tax changes impacting landlords. Buy-to-let landlords are seeing increases in taxes and stamp duty, causing some to decide to exit the market altogether, which is going to have further effects on agents. It’s likely there’ll be less stock to offer to applicants, and landlords may be looking to negotiate agent fees to offset their increased tax obligations. This may mean more work for agents to bring on new business and to upsell their services to existing landlords and clients.
An Employee’s Market
As many industries have seen in recent months, there are more jobs than people in the agency market. This is leading to rising salaries and increased competition for good talent, which means an increase in salary and recruitment costs for agencies; if a member of staff leaves the team it can cost 20-30% more to replace them. As many agencies reduced headcount over the course of the pandemic, this pay rise is likely to impact the market and cause problems, particularly for smaller players.
The overarching message for the coming period is that it’s important to adapt and place a priority on resilience. With changeable consumer behaviour, fewer transactions, lower stock levels, and higher salary costs, agencies need to be able to cut costs and operate more efficiently to survive.
With a stripped back and high-performing technology stack, agencies can build resilience and meet the coming challenges head-on.
For smaller agencies, it’s more sustainable to improve efficiency and maximise the output of a smaller team than shoulder increased hiring costs. By automating as many routine tasks as possible, you can minimise the amount of time your team spends on admin and refocus their efforts on value-adding activities.
With a good management system like MRI Sales and Lettings, many of the time-consuming tasks that require multiple solutions and duplication of effort can be consolidated into one system, with processes automated to not only save time, but also to avoid errors in data processing.
For instance, with a Making Tax Digital module within your management system you can calculate rental income for landlords and fill in forms at the click of a button.
By using technology that utilises the data you have to analyse and recognise trends, you can identify areas to bring in additional revenue and carve a focussed niche, rather than targeting an ever-widening section of the market.
Data collected from your customer portals and property searches can help to identify what your applicants are looking for and what your vendors and landlords are doing, which can open up new opportunities.
It’s important to fully understand how to extract the right information and use it in the most beneficial way. This means choosing a tech solution that provides excellent reporting features that provide an insight into where the highest areas for potential conversion are, allowing you to focus resource.
If you have a very good technology stack that’s capable of digitalising a lot of your clients’ journey, you can offer more self-service options via customer portals. This not only results in a reduced requirement for staff to be manning the phones and answering questions which could be done online, but also allows clients to take control of their own accounts and relationships with your business, providing them with a flexible way of engaging with you.
*Phuong Thi Kieu is an account executive at MRI Software