Jonathan Rolande: What do the final 100 days of 2023 hold for estate agents?

As Summer makes way for Autumn, many in the sector are bracing themselves for storm-clouds. But should they be? 

Here, in his latest column for Estate Agent Today, Jonathan Rolande shares his views on what the last three months of the year hold for the sector.

I’m not sure about you, but it feels to me like the year has flown by.

And, within a couple of weeks it will only be 100 days until the end of the year. 

In truth it’s no great surprise that time has passed quickly since we were raising a toast to the start of 2023. 

Anyone working in the property sector could write a book on the challenges and hurdles the year has presented so far. 

But as we approach the last 100 days those challenges are only going to carry on. 

Sadly, I didn’t get a crystal ball from Santa last Christmas, so I can’t say with certainty what the next three months will hold for us all.

In fact, if this year has taught me anything it’s to be deeply suspicious of anyone who speaks with certainty about what will happen next in the market. 

But, based on what I am seeing and feeling, there are some semi-educated predictions which can be made. 

In terms of housing sales, the number sold has dropped by 20% year-on-year. And it’s likely this trend will carry on. In fact, by the end of the year I wouldn’t be surprised to see the number reach a worrying 25%. 

Estate agents will also be impacted in the coming weeks by commercial rents. These huge rents for commercial properties are usually paid four times a year, March, June, September and December. For many companies, rent is the highest outgoing after wages and those without cash reserves will struggle to pay. 

We will inevitably see contractions – those with multiple offices will close expensive or less profitable branches. Those with a large lettings register will be safer, those that just rely on property sales will have seen turnover of 25% or more disappear.

Talking of rents, this has been one of the biggest issues this year. Residential rents have rocketed this year but I expect levels will soon stabilise as we reach the peak affordability threshold. 

But whilst rent inflation will ease, the shortage of property will worsen as more landlords quit the sector ahead of legislative changes. They will look to get out near the top of the market just as more people who otherwise might have bought will now be looking to rent. What a combination!

One of the biggest issues the sector faces over the next 100 days are the fact portals have a 10% - 20% price-hikes this year. This will take most branches to nearly £1,500 a month just for Rightmove. 

We’ll soon be looking at the Big Three and wondering where sacrifices can be made. Very few have the courage to ditch the number one player, but anecdotally, those who have are reporting no disastrous consequences. 

Is it wishful thinking or a smart business decision? Some of us may have to find out before too long.

Another question I am sure we will all be asking more over the coming weeks, if things toughen up, is this:

Is it time to get into bed with a competitor?

We’ve all been there.

The seller is getting itchy feet, their home is unsold and the Sole Agency agreement has expired. Rather than lose the instruction altogether, is now the time to link up with a sensible competitor to offer sellers a solution? 

When you get two agents on a Joint Sole Agency for only a small uplift in cost, it’s nearly two for the price of one. And once that second agent goes in with a reality check, the chances are they’ll beat resistance to a price reduction helping one of you to sell the place and split the commission. 

Better still, your competitor will return the favour with their own tough to sell property, boosting your register and, eventually, your bank balance.

This may be unusual, after the year we’ve all had, I’m determined to try and look to the positives. Friendlier competition may be an answer.

The market has been through tougher times than this. That’s why I am confident it will weather whatever the next 100 days throws at it. 

And to enjoy the good times again, so must we.