The Property Franchise Group has revealed that it has parted company with five Annagram offices which traded as CJ Hole.
The Burnham-on-Sea CJ Hole branch was one of those caught up in the price fixing cartel in the Somerset town.
The scandal came to light after CJ Hole admitted its part in the cartel, and escaped being fined. The other five agents were fined £370,000.
Yesterday The Property Franchise Group boss Ian Wilson said that when the time came for renewal, it was decided to part company with five of the Annagram offices, although a sixth was retained.
The departures were responsible for a 3% reduction in the size of the traditional high street agency network that trades under the various Property Franchise Group brands.
Speaking to EYE, Wilson also said he was pleased with how the group’s hybrid brand EweMove has been performing, with listings and transactions up.
He said it is now making a profit that covers the original £9m that the firm originally paid for EweMove.
He also said EweMove is now recruiting non-agents again.
Yesterday, The Property Franchise Group said that experienced agents out-performed non-agents for only the first two years: “In the third year, non-agents are as good as agents,” said Wilson.
He said that the criteria for recruitment were transferable sales skills; the ability to manage a business; and access to sufficient capital in the first year.
He said: “In the first year, you are talking beans on toast. I would say you need access to liquid funds of at least £30,000.”
Wilson also spoke of the fees ban, saying that only 5% of landlords had been resistant to having their fees increased.
He said that the strategy was to raise rents by an average of £50 a month and seek an extra 1.25% commission in management charges from landlords.
Wilson said: “Together these two steps can raise £10m, which will fully mitigate the effect of the ban.”
Wilson was upbeat about the future of the lettings industry, saying that he is seeing only a small rise in the number of landlords leaving the market.
He said there is still plenty of scope for growth for letting agents: “Even if the private rented sector were to cap out or shrink, there is still a lot of opportunity, as only 15% of landlords use a managing agent. In the more regulated environment to come, more are likely to do so.”
Wilson said that he has proved himself wrong on one forecast – there are currently fewer, not more, lettings businesses for sale.
“It is the quietest period we have experienced.
“My thoughts are that a lot of agents would like to sell up, but feel they need 12 months of accounts to show how they have performed since the ban.
“We are offering anyone who would like to exit now but is holding off until next year earn-out terms, as we are still looking to expand both organically and by acquisition.”
He said that 70% of the franchisees’ business is still in lettings.