It is not just over the pond where there’s a switch to full employment taking place. Judging by the number of job applications we’re getting from agents who are currently working for internet hybrids, the exodus of self-employed people here in the UK is also well under way.
As one of the few agencies advertising fully employed job roles at scale as we grow our Partnership model, we’re in a unique position to assess where the applicants are coming from and why.
Fed up with the lack of support from their parent companies, they’re telling us they felt let down during lockdown as the model failed to help them pay their bills.
Many of them hadn’t been trading long enough to have accounts which would have made them eligible for HMRC’s self-employed scheme.
They tell us the lack of financial support left them reeling and, faced with new uncertainty over the market as we enter the second coronavirus wave and local lockdowns, they don’t want to face that again.
Having a safe and secure well-paid job in agency is the way forward compared to the risk of self-employment or part-time where the self-employed person must take other roles to make ends meet.
As for the long-term viability of these models, we’ve yet to see them turn a profit. I’d hate to have been an early investor in Purplebricks, whose all-time share price of 525p in the summer of 2017 promised so much. Today, as I write, it stands at 62.5p. Hardly a vote of confidence. They’ve now sold off most of their overseas assets and seem only capable of sustaining market share if they throw millions of pounds at their marketing.
Despite a plethora of new internet hybrid agencies being launched, snapping at the heels of Purplebricks, Strike and YOPA, we’re seeing serious dissatisfaction among many of their agents and vendors.
How long can this be sustained? How long will their agents put up with low rewards for a heavy workload and a future of uncertainty? How long will the public take the risk of payment up front and no guarantee of sale? How long will they put up with poor customer service during the transaction process? How long before we see the hybrids crumble and fail?
Can they all survive another lockdown?
Paul Smith is chief executive officer of Spicerhaart.
Comments (26)
{all – could you kindly inform where you/the agents are with OTM – you were a founding member/on the board (i don’t know if you still are) but member agents don’t hear anything from you guys that in my mind represent the agents you helped to bring on board
The only true form of self employed is ownership…
All the rest is mis-representation by impersonation……
Totally agree – I like most forms of EA if they play on a fair and level paying field but – PBs media messages were unnecessary exceptionally Anti High Street Agent, Easyprop almost as bad with that ridiculous funeral procession – great for raising the publics perception of EAs – not, The self employed models don’t give all the facts – let’s be honest about all the income trails as that’s what interest me! … And some of the ridiculous figures being quoted like – last week I earned £3,000 or £7,000 in fees but on commission I would get £200 – just be honest and add your salary in for the last 3 months as that’s how long it takes (or thereabouts) and the employer has to suffer that along with other overheads. I reiterate that I like most EA models for what they are in the industry as they make it interesting and I like how agents like proptech as they think its going to give them an easy life, especially leadgen!!
Let’s celebrate “Word Association Day”
Paul Smith…..
Bell…. End.
…..and “Tomorrow’s Headline Today”
“B**m*n round up another 10 Donkeys”
Lol
Ok, I’ll have a bite…
Why oh why do agents all over the UK seem to think there is only one model of estate agency? It’s always this v that, the other v something else.
Just as there isn’t ONE type of client, there isn’t ONE type of estate agency model that will appeal to every single vendor.
Some people simply LIKE being self employed. Those who LIKE being self employed prefer one of the vastly different models that are out there, over the others. PB & eXp, for example.
Some like working in small teams for small companies, and that’s fine.
Others like to work in a more corporate environment. And you know what – it’s really not for me, but it’s also fine.
If it turns you on, you go for it.
If someone has tried self employment and wants to go back into corporate, it doesn’t mean the self employed model has failed. After all, no-one is saying that the corporate model has failed just because ex-corporate agents have gone into self employment.
Live and let live, and let’s simply concentrate on raising standards instead of bickering, eh?
Paul Smith is such a hypocrite after treating his staff like crap. Banging on about the failings of the payanyway onliners then switching to his new fangled HUB model. PS & RQ are both very bad for our industry despite what they bleat on about.
Watch the comments get turned off shortly… “Fed up with the lack of support from their parent companies, they’re telling us they felt let down during lockdown as the model failed to help them pay their bills.” Interesting statement based on the “support” Spicerhaart gave aprx 400 employees 15mins before lockdown on conference calls to let them know your redundant. I’m sure you helped paying their bills :S Aswell as the 20% paycut to those continuing to work. https://www.google.co.uk/amp/s/amp.theguardian.com/uk-news/2020/mar/21/uk-estate-agent-accused-of-inhumane-sacking-of-staff
What an absolute throbber
This wins the internet today LOL
I completely agree with BestandFinal and eventually some of the hybrids will get caught by HMRC’s crackdown where employment is being disguised as self-employment. A fair chunk of hybrid agents should be classed as employees … but not according their contracts.
I do not confess for one minute to understand the inner workings of the self employed agency model. However, as an observer looking from the outside in, it appears to me that some lessons have still not been learned from the onliners in regard to structuring and enticing good agents to join them.
One of the models which on a daily basis fanfairs itself having signed up more experienced agents, appear to have longer serving agents within their ranks earning off the back of the agents they convince to put pen to paper. Probably explains why so many of them are posting online telling everyone how great things are, rather than actually selling houses. Takes you back to the 80’s when pyramid selling was at its height. As time progresses this will probably wrangle with some of the Johny came latelys, just as many former LPEs at PB will tell you.The Territory Owners used to get up their noses, as they would be earning handsomely for doing nothing whilst the LPEs were run ragged.
Any body who takes the leap of faith will need to self fund themselves for at least four months. Then once they start to make money, any initial profit has to be offset against that initial four month outlay. And what happens if the market swings and sales are harder to come by. How long do you give it until you throw in the towel? I am not sure many could stomach a lengthy run of uncertainty, which could be just around the corner.
Then we have Mr Smiths offering to reinvent the wheel. Well, his mob and PB do not simply share the colour purple. Even the staff heading it up are the same! I wonder why they are not part of Boomin?
Estate agency is definitely in a state of flux,d everyone, whether a traditional agent on the high street, corporate or independent, or even working self employed from the garage, will all be at the mercy of the market and what it will offer us all in the coming months.
For the many, its not about share prices as this article rattles on about. It is simply about being able to do the job you know, and earn a living to support oneself in the process.
I was a self employed agent from 89-93 and know the benefits of renting a desk in an established #local agency. There are a lot of #local agents of my generation who are getting tired after 30 years of slog. I was talking to one on Sunday who’s at a crossroad with their business.
I think there is a lot to be said for working a desk in an agency and building up to buying the owner out.
That’s exactly my model – giving and taking that opportunity.
That said, I’m afraid I’m not one to share it for nothing. Actually I do sometimes wonder if any of the shares are free and if they truly are then how valuable are they! In my case my cost is/was 20 years of hard slog, long hours, time that could have been spent with family!, loss making years as well as highly profitable ones but it does now exist but I will not kid you, you cannot just buy success and profit, you still have to work and stick to the model rigidly and I can assure you it’s not being locked in the bedroom or working from the kitchen table, with kids intervening, the dog barking at the postman and squabbling over who uses the family car – of course, it’s not all as bad as that but afraid I am an advocat of a disciplined life that rewards success – depending of course your definition of success
“Fed up with the lack of support from their parent companies, they’re telling us they felt let down during lockdown as the model failed to help them pay their bills.”
“They tell us the lack of financial support left them reeling and, faced with new uncertainty over the market as we enter the second coronavirus wave and local lockdowns, they don’t want to face that again.“
Come on PIE, how can you give oxygen to this person when he treated his staff like this?
This guy isn’t for real surely? A lot of the people who were forced to go self employed during covid were because his company decided to make a large number people redundant and refused to change his stance to allow them to be on furlough. He wasn’t so concerned about them being able to support themselves and pay the mortgage then was he?!
The self employed model is clearly not for everyone. If you are not a good estate agent in a corporate agency, you are probably going to be not very good as a self employed agent. You need to have the focus and the drive to make it succeed, and you are not going to get rich overnight. Becoming a self employed agent isn’t much different from opening a high street office, you will have to put a lot of hard work and effort in, and potentially a bit of money too. Those people thinking they can start up on their own and make a quick buck are obviously deluded and don’t understand the business they are working in.
Propertyman556. “Becoming a self employed agent isn’t much different from opening a high street office, you will have to put a lot of hard work and effort in, and potentially a bit of money too”
Can I ask a genuine question. Why would anybody want to be self employed within the model being offered at the moment, why not simply go it alone and open a high street office or work from home under your own banner?
Sure you have the portal costs, but thats the only thing I can see as a hurdle initially. Why give approx a third of your eanings plus a subscription when if you were truy stand alone, you retain everything you are earn. This puzzles me.
I would imagine that for most it is the cost of the portals, getting everything set up like crm systems etc. They would rather pay a low set up/ monthly fee and not have the risk of large overheads.
My thoughts/suspicions already.
If these agents who flock to the likes of these models, had an ounce of thought, a handful would get together to create a network of agents under one name/brand. Combine what they would usually pay in subscriptions (I believe £150 + VAT a month) and together could afford to pay for portal advertising and even a basic CRM. They would then keep 100% of the fee and have a share in a truly joint venture with the ability to cover a wider area.
Mine would be a different reason but if you listen to the Watkins Sofa the word scared, scary comes out all they time – they need a newtwork base and training and asking off each other – to a certain extent the model is built off that. In the US the culture is strong and many say its all about the culture here but ven having asked anumber of times the culture has not been repeated in the words of the UDS counterpart.
That said the two US models have moved forward a lot in the last year – certainly in agent count
“Having a safe and secure well-paid job in agency is the way forward compared to the risk of self-employment or part-time where the self-employed person must take other roles to make ends meet.”
Let’s not forget the number of those so called safe and secure well-paid jobs in the industry that were lost as a result of the lockdown and the protection of other higher positions.
I’m not self employed myself, but I admire all those who take that jump, be it in this industry, or any other, take control of their destiny, accept the rough with the smooth and have the long game mindset.
If lockdown proved something, it was, for some, the loyalty of employers to their employees. ‘People Before Profits’.
Well let’s not let some inconvenient facts get in the way of a good story .
“I;hate to have been an early investor in Purplebricks ”
Why ?
Strange comment as it’s the early investors who have done best they have all trousered a packet.
The Bruces ,DN Capital, Paul Pindar, & Errol Damelin and many others.Not forgetting the much maligned Neil Woodford where his funds still came out the right side on Bricks
.Those investors who backed the Bruces pre listing and others have been able to cash in their chips and walk away with millions.Thank you very much and good night
The same of course can’t be said of Axel Spinger who arrived much later at the party who have done their proverbials .
Even the great unwashed who arrived in at 100p on the stock market listing in late 2014 where the share price briefly dipped to 74p in Jan 2015 and then rallied would also strongly disagree with you .They have been laughing all the way to the bank.
From January 2015 to January 2020 the share price had risen only upwards and March 2020 before it fell below Jan 2015 low of 74p given early investors the opportunity to walk away with a profit for all those years
In fact those early investors that managed to exit before July 2017 when it rocket shipped for 2 years saw the share price multi bag as you say peaking at 525p briefly
Those early investors who know that trees never grow all the way to heaven and took the opportunity to step off the bus at the right time just before they opened up their ill fated venture in USA in Sept 2017 ..
Probably one of the best performing shares in their portfolio.
Some even achieving a 6 timer. which has been sufficent for some early small investors to cash in their chips into a strong market trouser a profit and pay off their mortgages with the proceeds
Every other early doors investor who sold pre Feb 2020 would have walked away with a profit .You can’t go broke doing that .
You’ve missed the point H. Life and business isn’t always about making a packet buying and selling shares. This piece suggests some hybrid agents can’t afford to pay their mortgages or survive after being sucked in by “big promises” and very low returns. It’s a poorly disguised advertorial for another get rich quick scheme, but at the same time it reminds us that a lot of bedroom businesses are very weak and may not survive a downturn.
Congratulations for making money from PB. There have also been casualties who deserve more compassion and less gloating.
Well you are jumping to the wrong conclusion Certainly wasnt an early investor in Bricks just pointing out that the early investors did very well financially and certainly no fan of Bricks
” You’ve missed the point H. Life and business isn’t always about making a packet”
..”agents can’t afford to pay their mortgages or survive”
Pot/ Kettle
I guess that was the Authors first thoughts were staff’s mortgages when immediately booted into touch staff at the 1st whiff of virus in March
“Spicerhaart CEO Paul Smith has spoken out about the “very difficult decision” to lay off some of his staff, and warned that we are only at the start of the pandemic. He has also said that some of his offices will never re-open and that other agency businesses are taking similar action.
This is his full statement:
“As a result of the coronavirus outbreak, we have had to take the very difficult decision to lay off some of our staff. The remainder – around 1,750 – are now working from home and our branches are temporarily closed in order to keep our staff and customers safe. Most of our branches will re-open when it is safe to do so.
We totally understand the challenges and hardship that this very difficult decision will have for the staff who’ve been laid off, especially at this time of crisis with Covid-19. We have apologised to the individuals concerned and will be discussing their leaving terms with them.”
…
I still think it’s a fair point to highlight the plight of the new self-employed tranche of agents who are barely scraping a living. I fully accept the irony of the above piece, which is also a sale pitch for more of the same. They are being sold a pup.
I’m afraid I don’t buy into the rationale of keeping a business running at full costs when overheads can be reduced. Paul’s style of communication may have been wrong, but the rationale was right.
“I’m afraid I don’t buy into the rationale of keeping a business running at full costs when overheads can be reduced. Paul’s style of communication may have been wrong, but the rationale was right. ”
You can’t be serious .Disagree totally The decision was kneejerk within milliseconds and before the Gov’t reached out with furloughing and handouts
The poor loyal staff -the first cost cut
Maybe he is remploying those he culled