Renewed calls for licensing
With the dust now settling after the General Election, it is time to renew our calls for the licensing of estate agents.
The market is once again in a state of flux, with every town seeing a flurry of new estate agencies, not to mention the rash of online services appearing.
But with no barriers to entry, there are no checks on these estate agents, and we are already seeing a rise in complaints to property redress schemes – up 42% last year according to the largest, The Property Ombudsman (TPO).
While this has been partly attributed to the introduction of legislation making it compulsory to join such a scheme and partly because consumers are increasingly likely to complain if dissatisfied, there is no doubt in my mind that the lack of compulsory licensing is a contributory factor.
Everyone should be trained to a certain proven standard before they are allowed to practise – as in many other professions. Let’s face it, you wouldn’t want van drivers on the road if they haven’t passed their test.
We cannot rely on the threat of sanctions from an Ombudsman or Office of Fair Trading to put our own house in order. This is surely a case of shutting the stable door after the horse has bolted.
As an industry, we need to defend our reputation and call on the Government to introduce centralised licensing as a matter of urgency, and not self-licensing either.
After lobbying housing ministers and MPs – including Brandon Lewis, Grant Shapps and Michael Gove – to plead our case, with significant interest and even agreement, I only hope that our calls will be listened to and will not fall on deaf ears.
New immigration rules will penalise all tenants
Talking of legislation, since when have lettings agents become immigration officers for border control?
Asking letting agents to vet the immigration status of prospective tenants with the threat of a £3,000 fine if they let to someone who isn’t eligible adds yet another administrative burden to what is already a labour- and time-intensive process.
While it is laudable to ensure that housing stock is available for those who are eligible to live in the UK, it is inevitable that agents’ fees will have to increase – and ultimately it will be the tenant who pays the price.
Given that more people are renting for longer before getting on the housing ladder, these new rules will penalise the tenants and are counter-intuitive.
We need to give border control back to those guarding our borders and ensure councils are supported and funded to tackle rogue landlords who exploit vulnerable people in inferior accommodation.
Not in our league
When it comes to league tables, I’m all for a level playing field. In football, you match similar ability teams against each other. When assessing academic institutions, you compare exam results for the same subjects.
Yet in estate agency, we seem to have a lack of parity when it comes to measuring up.
Franchised estate agencies are now sitting alongside independently and corporately-owned estate agencies in the branch league table, giving a distorted view of the industry.
As the parent company, they take the money from a franchisee in exchange for their brand and marketing materials. They don’t have the same controls over service levels and customer care as we do: it is not the same as running one company – rather like comparing apples and pears.
I’m not knocking the franchise business model. Indeed, it is very effective and works across many industries. Our communities would be all the poorer if it wasn’t for highly successful and hard-working franchisees running our coffee shops, restaurants and hotel chains.
So let’s give franchised estate agencies their own league table and pit corporate or independently-owned businesses against each other in a separate table.
And while I appreciate that size isn’t everything, the league tables are a measure of success and put Spicerhaart in third place for fully owned branches behind Countrywide and Connells, while LSL, Martin & Co and Belvoir take the top three slots for franchised branches.
For those of us who have grown our businesses the hard way, it is hard to fathom how anyone can think that a franchised business model can remotely compare.
Quality not quantity
We’ve experienced portals sending thousands of leads that are of poor quality from so-called buyers and sellers with no motivation to do anything.
The leads are of such poor quality that I strongly suspect the portals in question are simply buying traffic, pumping up their headline numbers and telling agents how wonderful they are then, when the leads inevitably fail to convert, how terrible we are in not converting them.
My challenge to them is give us the quality, please. It costs an awful lot to sift out ‘time wasters’ and ‘non-existent people’.
Feedback that I get tells me that On The Market certainly give us the best quality leads.
Comments (13)
Surely the good prevail and succeed and the poor/bad fail and disappear. There is no greater measure of success than reputation. There will always be bad eggs whether licencing is introduced or not.
League tables? Hmmmm…….. have you had a look at rater agent?
Is Mr Smith paying for this advert for his company? Sounds like he would like to eliminate any competition.
As for his views on property portals? I thought I was reading an article from the National Inquirer it was that bizarre. Talk about conspiracy theories.
Some bright spark will be suggesting mandatory membership of the NAEA next.
Once I had got over my disappointment that this wasn’t an article about fashion in the estate agency industry, I found myself agreeing with much of what Paul had to say. Its fair to say Haart aren’t exactly loved in the industry but Paul is absolutely right when he talks about the standards within the business. When you have companies like Ewe something launching videos saying one weeks training then off you go, the problem this creates for those of us that have cut our teeth in the business before setting up our own firms is that it actually devalues any professionalism we may in fact offer. Sellers have to guess and that surely can’t be right.
Im not so hung up on the lead tables, possibly because I don’t run as many offices as Paul, and If I’m honest I think large chains are actually often partly responsible for the differing standards in the industry, after all I’m sure we’ve all heard stories of the Junior neg who was running an office in 6 months! That said though the industry does need some form of licensing, it should of course have come from organisations like the NAEA but I won’t hold my breath on that one.
Dude I’m a cup half full kinda guy with a sunny disposition, that’s my wheelhouse. Sure I was adopted but they loved me like I was real so everything’s peachy but Smithy’s working my last nerve. I’m not buying it. I’m with wardy, valid points from a guy that doesn’t practice what he preaches is like sterilising the needle…for a lethal injection. Jeez the big mope had me second guessing though. A hotdog’s still a sandwiche right?
As a small business owner and agent of nearly 20 years, I personally would absolutely love licencing to come in. This would allow me to gain some recognition for all the years of hard earned and hard won experience that I have, that in my opinion puts me head and shoulders above “darren” in “corporate R us ” who has been doing “the job” for a year, is already a “senior neg” and as far as the public is concerned is the same as me. (apologies to any Darrens out there, no offence intended)
I doubt I’ll ever take anything Smith says about the call for licensing seriously, in the same way Smith doesn’t take anything the ASA has to say seriously.
I have to say I was a little surprised at some of the comments so far this morning but I fully expect that there will be many more. As one of the posts has said, Paul Smith has put his head above the parapet…
I’m heading up to Lettings Live today and read Pauls article with interest. Juggling 2 offices and staff can be challenging enough at times, particularly with limited resources, but I would have thought that the goal for most in my shoes is to offer great service, compete and to punch above your weight. At what point does a small independent, become viewed as a corporate and, in reality and from a consumers point of view, what’s the difference?
For a long time ‘corporate’ was viewed as a dirty word but if your business grows exponentially is that not, essentially, what you become? I’m not saying that this for all but its clearly a route taken by Paul Smith and SH and you cant really criticise him for that and the company that’s been built?
His comments on training and licensing are spot on in my view. Why wouldn’t we want that and does it not remain a real issue that more legislation surrounds the lettings market than it does that of the residential sales market? Agents opening in good times, closing in bad and struggling with cash flow (as many are right now with appallingly slow transaction times) is a reality of our business and cyclical.
Legislation in regards to monitoring tenants is also, I think , a fair point but one that prompts healthy debate. Politicians trying to point score prior to an election is hopefully a thing of the past (until next time) and any change requires serious input from those working in the market place day in and day out.
Finally and in regards to ‘size’ and league tables. Generally I find that that those that think size is a good thing, have it, those that don’t, sadly don’t, so managing a two branch business leaves me as about average I would suppose….
I think Pauls comments show that regardless of how successful he may have become, he still seeks recognition and wants to be seen as No 1 in the field. I’m not sure that’s a bad attribute from the man at the top and whilst some might find it a little churlish, passion in our business is no bad thing in my view. From a personal point of view and upon reading a couple of the posts so far this morning, I can honestly say that ‘dodgy’ independents cause me as many issues in my market place as any large independent or corporate. With any company, large or small, company ethos is great but if those on the shop floor aren’t reinforcing it, your dead in the water, certainly as far as those offices and those staff members are concerned, and perhaps that’s why some have posted negative views about SH. What you can’t say in any seriousness is that every member of staff and every office is a problem?Do I agree with the way Paul has put across his views, no, not entirely, but I think he is entitled to do so.
Poor quality leads from the portals? Boo=boo! How about building your brand locally with interesting, compelling and unique reasons to do business with your firm. It’s called attraction marketing, as opposed to going after every lead that has a warm pulse.
ARE YOU FOR REAL??
Most High Street Agents have spent DECADES “building their brand” as you so impersonally put it – we in the industry prefer to call it “successfully selling homes” as our clients seem to place more reliance on that type of terminology when it comes to choosing and appointing the most appropriate Agent for their move.
I SO look forward to my first – and without doubt only – “agency negotiation” with you or your like, Sir…
I was surprised when I saw that this column was ‘coming soon’. Even more surprised this morning when I saw that comments were allowed. Healthy debate is of course to be encouraged. Mr Smith has stuck his ‘head above the parapet’ and I fully expect that we may see a high number of story reads and comments on this article.
Well done Harry, thank you! I have been sat here for over an hour waiting. I didn’t want to start an argument in an empty room.
The volumes of traffic to Rightmove and Zoopla suggest they are entertainment channels rather than serious punter places. Does it make sense to stop charging the content providers (agents) and let Rightmove and Zoopla to charge say £1 per month for applicant access?
If both leading portals are so absolutely mega at attracting traffic it makes sense to encourage continued content so the viewers have something to gawp at!
Thanks for the dislike, such an eloquent reply means I have to interpret it as best I can.
You need to understand how brilliant my plan is, Agents get exposure, Rightmove and Zoopla get to keep content, competing agents and nosey neighbours are kept a breast of goings on. £12 a year? Less than the cost of a round of drinks!
What a massive pile of gibberish.
It is a known fact that when it comes to quality, Spicer’s approach is very far down any league table. In our area they are known for winning their business from very little apart from touting.
Paul, there is no league table, you just want to present your business as bigger than it is. You go on to ask for an emphasis on quality rather than quantity – shouldn’t the same rule apply to your business in any league table that has any meaning?
Furthermore, your comments about OTM are mis-informed at best, woefully misleaging at worst. The percentage of OTM’s ‘paid for’ traffic is much higher than any other portal as they have no brand recognition and therefore are much more reliant on buying in traffic. You are the largest business on OTM and if the best you have is ‘feedback’ I would suggest that a business of your size should be more interested in fact that vague anecdote.
Misleading, not misleaging. Sorry was busy trying to mop up my cornflakes…