Why agents must closely monitor their local market to be successful in 2024

We’re now just 2 days away from the end of 2023 and what a year it’s been for the property industry. It began and continued with headlines warning of anything up to a hair-raising 30% drop in house prices but thankfully we never got close to that happening. The market is performing well - all things considered - with the data showing transactions are expected to surpass one million this year which compares to 1.1million transactions achieved in the 'more normal' market of 2019. This degree of resilience which has underpinned the market throughout the year has left some of the doom-laden predictions seeming erroneous at best. While the market is not in the doldrums, we recognise there are challenges with mortgage rates and the pace of inflation remaining unsettled, possibly a new government around the corner, and a frenetic lettings sector with supply still 21% lower than 2019.

Business strategy

Uncertainty makes business strategising difficult but by harnessing the power of data, the best way both sales and lettings agents can position themselves for success in 2024, is by gaining an accurate picture of their local marketplace. Tracking market activity with over 99.6% of all residential listings in real-time gives agents the chance to discover how they, their competitors and the national market are performing. These are necessary foundation blocks for agents to launch an effective business strategy which can identify opportunities while helping them to laser-focus their marketing on the right audience.

It's important to apportion the correct budget to different types of targeting based on marketplace activity. For example, since 83% of instructions in the last year came from properties that were not listed for sale in the last three months, targeting these homes should be a key focus. However, of all the properties withdrawn between October 2021 and September 2022, 46% came back to the market within a year and 58% within two years, so a complementary strategy to target these listings is also necessary. Every listing that doesn’t sell costs agents time, effort and money so having the right data at their fingertips to understand what’s selling is vital.

Diverse portfolio of stock

Understanding how local market trends compare nationally is also important. We know demand for flats has increased 10.5% in the last year, however, in the North West flats currently take more than three and a half months to get a sale agreed and more than a third of those sales are falling through. Agents who strive for a diverse portfolio of stock will be best placed to secure a consistent income stream due to the varying sale periods across all types of property. At the same time, those who can demonstrate an informed opinion of the market with granular data insights will increase their likelihood of winning an instruction.

In the lettings sector, supply has risen slightly in the last year but nowhere near pre-pandemic levels and predominantly in higher-priced properties. The volume of £3k pcm+ properties coming to the market for rent has increased by 52%, while supply of the lowest-priced properties has fallen by 19% in the last year. We’re now in a market where almost every property advertised (aside from the most expensive) will be let which has culminated in tenants now staying put for longer. In 2019 the average length of tenancy was 3.6 years but in 2023 that increased 32% to 4.8 years.

Hybrids gaining ground

The slower turnover of lettings stock has reduced agents’ incomes so we’re recommending agents have as much of their lettings book on full property management as possible, or at the very least on rent collection. We’ve also found that more landlords are choosing not to use a traditional letting agent and that hybrid agents are now gaining ground due to a cannibalisation of the market through the rapid growth of OpenRent. Within lettings, hybrid agents’ market share has increased by 14% in the last year and 88% since 2019. Specifically, OpenRent accounts for 12.6% of this year’s 14% total. Identifying landlords who list on OpenRent and communicating the advantages of using a letting agent, supported by data, will help the agent demonstrate why they’re the best person to market a property.

2024 is expected to bring fresh challenges to estate agents so there’s no better time than today to plan ahead and fully understand the competitive landscape. This will undoubtedly build a solid strategy for success and by enhancing their offering with valuable data points, agents will ensure they’re complementing their businesses with the very best digital offerings.    

Katy Billany is Executive Director of TwentyEA which has over 15 years of experience providing data to Estate Agents and other residential property market professionals. She has published a guide on ‘How to survive in a challenging market’ which is free to download. Visit TwentyEA for more.