Michael Day: A business plan will be crucial to navigate 2024

Business plans will be key for agents looking to successfully navigate 2024, an industry consultant and trainer has said.

Michael Day, a former partner at Connells and founder of the Integra Property Services consultancy and training business, has outlined what tools he believes agents need for a successful 2024.

Writing exclusively for Estate Agent Today, he said: “Last year I was working with a number of clients and we generally prepared for a market that was changing and my best guesstimate was that there would be a reduction in transactions of around 20% and falls in property values of around 10%. In my opinion as we leave 2023, that view was not too far off reality.

“By having plans for business based on these assumptions, my clients were best able to take an approach that was neither overly optimistic or too doom laden. It did, of course, mean that for many sales businesses, the profitability of the sales business was going to be affected or even wiped out.

“The prognosis for lettings was of a largely static market in terms of transactions but with opportunities for revenue growth from both increased rents and from moving more of the portfolio into fully managed services.”

He says the key to success in 2024 will be having a plan and keeping it under review. 

Day added: “I recently spoke at a major industry conference about the ten Ps. The four major cost areas of people, premises, portals (marketing) and proptech. The need to have a clear proposition and the processes to drive performance and productivity. Ultimately leading to the most important P – Profit!

“When asking the delegates about their business plans for 2024, less than 10% of the room had a written plan in place. Good news for the other 90% in my opinion.”

He expects 2024 to continue in a similar way to 2024, adding:  “We have seen the shock of mortgage rates rise and, whilst the full effect of these increases has yet to be felt, lenders have been “stress testing” borrowers since the financial crash and so, whilst it may impact the ability of people to move, we are unlikely to see a significant rise in distressed sales.
“Housebuilding will likely remain at levels below those needed to satisfy demand.

“There are always people that need to move – employment, death, divorce, family, financial are all drivers of activity.”

He predicts that lettings will continue to have an imbalance between supply and demand and, although affordability will likely stop rents rising at the pace they have, there will continue to be a strong market for those with stock. 

Day said: “Small landlords exiting the market will continue adding to the supply and demand imbalance.”

He predicts that transactional sales volumes will remain at current levels with prices perhaps edging down a little further but by no more than 5%.

Day added: “The lettings market will therefore remain fairly static. Major players will continue to grow by acquisition rather than organically. Opportunities to restructure business models (remember the ten Ps) will need to be taken in order to maintain or grow revenues and profits and to take advantage, or at least mitigate, any impact from the potential end of fixed term tenancies.”

Crucially, he said, agents must take a detailed look at every aspect of their business and have a plan. 

He added: “Remember man doesn’t plan to fail but often fails to plan. 

“Keep your plan under regular review and be prepared to adjust where necessary. 2024 will see a General Election that will likely see people sit on their hands. Those with a plan will be best placed to identify changes and trends and take appropriate action.

“After all. we cannot adjust the wind but we can adjust our sails.”