Lettings revenue still essential to agency economics, says property platform
Data analysis by property platform Boomin shows that house sales remain the predominant source of income for agents even as house prices continue to escalate and deposits for first time buyers become ever more expensive.
According to the Boomin research, sales account for an estimated 53% of branches, versus a 47% market share for lettings branches.
The new research aimed to measure how lettings can provide a substantial revenue stream for the nation’s property agents.
Boomin found that between 2020 and 2021, property services provider LSL saw the income generated from property sales increase by 47% versus just a 6% increase in lettings income. Per branch, LSL generated an average income of £203,116 as a result of sales income, while lettings generated £175,637 per branch.
Meanwhile, estate agency Hunters saw a 54% jump in sales income versus just a 12% increase in income generated via lettings. Average sales income per branch was £205,288, while lettings generated just £83,654.
However, numbers from estate agency Foxtons offers proof that lettings can not only substantially supplement the income generated by an agent, but can be the driving force behind their overall performance.
In 2021, Foxtons generated £74.3 million in lettings revenue, averaging £1.3 million in lettings income per branch. In the same year, sales revenue totalled £42.7 million, averaging £748,649 per branch.
In 2019, prior to its acquisition by Connells, Countrywide also saw the revenue generated via lettings exceed that of sales, averaging £216,547 in lettings income per branch versus £210,829 as a result of sales.
Boomin said that property businesses that do not add a lettings offering are missing out on an estimated £147,079 of lettings income per branch.
“Lettings as a focus creates a huge additional financial opportunity for sales only agents as house prices and deposits become further out of reach,” Michael Bruce, chief executive and founder of Boomin, said.
“Sales is the predominant focus for many agents and who can blame them? Particularly when we’ve just witnessed such a sustained period of market activity that has helped drive sales revenues up considerably.”
At the same time, Bruce said, the ongoing resources and specialist expertise required to execute within the lettings space can act as a perceived deterrent to many agents.
“But this additional time and resource can be easily justified now that consumer affordability is potentially turning toward rentals,” he pointed out.
