Self-employed models ‘driving growth’ of agency brands

Self-employed agency models are helping drive growth in the estate agency sector, while larger firms struggle to maintain positive momentum, research suggests.

Agency brand eXp UK has analysed the changing number of VAT and/or PAYE-registered estate agency enterprises in the UK between 2017 and 2022, segmenting those businesses by their employee count ranging from firms with 0-5 employees to those with 500-plus.  

The data reveals that small agencies of between 0-5 employees have recorded the strongest growth when it comes to the number of businesses in operation. 

Since 2017, such businesses have increased in number every year, rising by 2.9% in 2018, 3% in 2019, 1% in 2020 - despite the problematic landscape caused by the pandemic - and 5.1% in 2021. 

The largest leap was in 2022 at 12.7%, according to the research, to stand at 19,650.

Over the same time period, the number of agencies with 500+ employees has remained entirely unchanged, sitting at a total of 25. 

Agencies of between 250 - 499 employees have recorded just one annual increase. In 2019, the number rose by 50% to go from 10 to 15 businesses and it has remained there ever since. 

Agencies with 50 - 249 employees have fluctuated up and down over the five years, most recently recording a 5% drop in 2022 to sit at a current total of 190. 

It’s a similar picture for agencies of 10 - 49 employees, but five years of ups and downs have paved the way to a slight increase of 2.7% in 2022 and the total number of firms is now 1,925. 

As for firms of 6 - 9 employees, they now total 2,695 having seen an increase of 3.7% in 2022.

It comes as separate research by GetAgent fund there are currently 24,965 operational agents compared with 24,500 in 2022.

Adam Day, head of eXp UK, said: “The recent and ongoing rise of self-employed agency in the UK is by no means the result of happenstance - it’s not a fluke. It is, on one hand, a natural moment of industry evolution and, on the other, a byproduct of wider economic conditions. 

“Good estate agency has always been centred around building reputation and relationships with your clients and within your local community. It’s also a creative pursuit, one that often requires improvisation and ingenuity in decision making. When you work as one small part of a large organisation, the weight of that brand can often stifle an agent’s ability to do all these things and the best agents are starting to realise this. 

“As for the impact of wider economic issues: a self-employed agent has agility and, if you’ll excuse the pun, agency. When times are difficult, the agility that comes from being self-employed, and the agency to be able to make your own decisions around mitigating negative market outlook and, in many cases, even benefit from the opportunities that arise from it, means you have a much greater chance of thriving and succeeding. That’s the power of entrepreneurship and that’s why self-employed agency is on the rise.”