Is your agency ready for Covid phase three?

On the basis that it is said that history is written by the winners, it will be some time before anyone can talk with any certainty about the aftermath of covid and its changes on all of our lives.

In the property industry, the last eighteen months have seen three main phases occur.

1. The initial shock of covid and lockdown with all of the understandable fears and uncertainties resulting in the battening down of hatches and slashing of costs as part of a cautious approach to surviving.

2. Government intervention that, on a wider level, provided business support throughThe  the JRS scheme and business grants and loans and, on a specific industry level created an active marketplace with the introduction of stamp duty discounts and relaxations that allowed the sector to continue to trade. This resulted in estate agents enjoying a year of high activity and success that far exceeded pre covid expectations.

3. The third phase is now underway. Lockdown restrictions have been eased as a result of the successful vaccination roll out but, as economic and social activity increases, the levels of Government support and subsidy are being removed. In the short term, economic growth will race ahead although inflation is increasing, unemployment is likely to rise and there may be increasing pressure on interest rates. The surge of activity in the home buying and selling market seen in phase two has slowed with supply falling way short of demand. At some point the Government will have to find ways of increasing tax revenues in order to recoup the huge costs incurred during phase two.

So, what lessons have been learned and what, longer term, outcomes are likely?

Businesses should have learned a lot from phase one. How resilient their operations were, and are, to seismic change. They should have learned what areas of expenditure were vital to their operations and what were just vanity or superfluous to success.

Productivity is the driver of profitability and being “leaner and fitter” is key. The complacent days of “too much fat on the bone” should have ended but I wonder if they have?

Premises were of no real value when closed and, in many sectors, the benefits of physical inventory became outweighed by the flexibility and lower cost of remote and more flexible working patterns.

Better use of technology helped many, with customer facing platforms that enabled 24/7 remote access and the use of video technology to organise viewings on a much more time efficient and productive basis coming to the fore.

Many forward-looking businesses took the opportunities presented by phase one to change their modus operandi forever. Many however, presented with the lifelines of Government intervention in phase two, simply reverted to type and their businesses do not look significantly different to how they did pre-covid. They will point to the success of the year in question. I will point to the potentially greater successes of those who adopted new thinking, adapted their approach and improved on their propositions and delivery.

Phase two saw a huge growth in new business models – noticeably it gave a “leg up” to the so called “self-employed” models where, often good quality individuals, were able to generate faster returns from scratch than they might have been able to do under a more “normal” market.

As part of reviewing operations in phases one and two, we have seen considerable consolidation amongst businesses in the sector. Connells took the opportunity to acquire Countrywide and whilst they were always likely to turn this poorly performing oil tanker of a business around, they have been able to use the market to do so more quickly and to benefit even more significantly from the goodwill amongst staff created.

We have also seen a number of regional and local mergers and acquisitions where synergy and the benefits of increased “buying power” and “economies of scale” make sense.

Phase three will, in my opinion, start to see a truer picture of the fallout of covid.

We are already seeing weaker agents cutting fees in order to try and secure stock. We are also likely to enter a new round in the “Portal Wars” which saw a new entrant – Boomin – emerge during phase two. Phase One saw the “No to Rightmove” campaign arrive but disappear nearly as quickly. Some agents did change their marketing strategies as part of their reviews on cost and effectiveness but, with the market uplift in phase two, most carried on as before. As things tighten, portal expenditure will, once again, be in the spotlight – not just in pound note terms but in effectiveness and value add to an agent and their clients and customers.

Those that failed to review and instigate change in phase one and have been “patting themselves on the back” for their successful phase two, may now find that they start slipping behind those that did as we move forward in phase three.

There are too many agents, the fixed costs of running an agency are generally too high, customer expectations are increasing, as are the requirements for greater professionalism and compliance with increasing regulation.

Those that had a business plan pre covid were best placed to adjust and react. Those that didn’t have a plan had only a “gut feeling” to rely on and many have just worked harder not smarter and their businesses are no better placed for the future than they were pre-covid.

One of my favourite quotes is that “I cannot change the wind but I can adjust my sails” – this has never been truer than in the last eighteen months. It is not too late to change.

The question is – who will be consigned to history and who will be writing it?

Michael S Day MBA FRICS FNAEA FARLA, is Managing Director of Integra Property Services and a director of teclet


Email the story to a friend


  1. Simon Bradbury

    Excellent analysis Mike – thanks.

  2. Eyereaderturnedposter12

    “We are already seeing weaker agents cutting their fees to secure stock…”

    It is clear in our areas of operations that in fact those who are cutting fees, are predominantly the larger/better known Agencies.

    LRG and Chancellors to name two…it would be a push to suggest that these are “weaker agents”.

    The gradual reduction in fees offered, has been a factor long before the Covid issue and I’m unsure how you may be seeking to link the two subjects.



    1. JEL

      same here in the north west with a brand of Connells….well known, good reputation and doing really low fees ….its very frustrating

    2. aSalesAgent

      The agencies are large/better-known, but their agents local to you must be weak, if they cannot even negotiate for themselves a decent fee.

  3. Hillofwad71

    There are those with a business plan  to recruit aggressively . We will see how that works out overall.

    What is concerning is those that are  seeking  to  recruit  fresh meat are using H1 2021 as the yardstick in promotion  ,forgetting of course that all the signs for H2 are  a clfffall in inventory.

    No prizes for guessing who!


    “Manchester is one of the top places to be when it comes to estate agency right now!

    Not only is it one of the hottest property markets in the UK, with annual house price growth at just under 13% and excellent earning potential YOU REALLY CAN’T GO WRONG. ”

    Despite that upbeat message,the market is fully aware that instructions are hard won .That pitch really doesn’t reflect the risks as those recently recruited are finding .

    Early days but fresh lamb Urmston in Manchester have yet to gain their maiden instruction been trading over 2 months. The 2 others recently recruited in Manchester .Hyde & Mottram have had 2 ,offering to sell at 0.75%

    Didsbury an experienced agent (Former Purplebricks &Nicholas Humphrey) Ist 3 months 3 sales instructions and 3 rentals .Offering a fixed fee of £995 including VAT to the 1st 10

    The other Manchester franchisee Cheadle Hulme who have been operating since 2016  currently have  an inventory of  9
    They submitted their latest  accounts last week showing a deficit.

    In nearby Macclesfield  the  3rd franchisee!!  for  the area Macclesfield North opened up a few weeks ago so the best of luck to him

    Certainly nowhere near the franchisee for Brixton who is  currently used in the pitch to recruit albeit achieved back in 2016

    “I listed 16 properties in South London within  a 3 month period of launching with a potential income of £72,381”

    The promotion for Manchster is rinsed &repeated for Birmingham & Sheffield too !

    That message of “YOU REALLY CAN’T GO WRONG ” must stick in the craw of the following franchisees in those  3 areas where it did go badly wrong .

    Altrincham ,Bolton North, Bournville,Bromsgrove, Chester East ,Cheadle ,.Crystal Peaks Doncaster, Kidderminster Macclesfield (2 ) Salford , Stalybridge &.Wylde Green

    The majority  who have started  this  year  have  just a handful of instructions . Some with zero .
    South Shore (Blackpool) have been in operation since the 11th May yet to gain their  1st instruction . Witney already has shut up shop

    Although the scales  are balanced in 1 direction ! Hats off to Lutterworth., Wakefield East, Scarborough ,Stafford and Colne Valley who have started well .

  4. majortom1

    That’s positive !although probably accurate- that’s why some of the PLC type agencies haven’t been seen bragging about super profits at 6 months like they normally do !

    It was blinking obvious the market would be one of two halves -and agents that are cutting fees -it’s because with certain Nationals the sale is the sprat that catches the FS and Legal Mackerel-you can’t knock it if they get away with what is in some cases conditional selling


    Happy  days ahead Michael !


  5. majortom1

    That’s positive – not-!although probably accurate- that’s why some of the PLC type agencies haven’t been seen bragging about super profits at 6 months like they normally do !

    It was blinking obvious the market 2021 would be one of two halves -and agents that are cutting fees -it’s because with certain Nationals it is now the sale is the sprat that catches the FS and Legal Mackerel-you can’t knock it if they get away with what is in some cases conditional selling


    Happy  days ahead Michael !



You must be logged in to report this comment!

Comments are closed.

Thank you for signing up to our newsletter, we have sent you an email asking you to confirm your subscription. Additionally if you would like to create a free EYE account which allows you to comment on news stories and manage your email subscriptions please enter a password below.