Agency business model set to change if second wave of Covid hits

1 October 2020 | Renting

Agency business model set to change if second wave of Covid hits

The business model underpinning most lettings agencies is set to change fundamentally if there is the much-anticipated second wave of Coronavirus.

That’s the view of Jon Cooke, chief executive of epropservices, the parent company of The Guild of Property Professionals and Fine & Country.

Referring to the whole agency sector – lettings and sales – he says: “We have already seen the industry evolve 10 years within a few months as a result of the pandemic hitting our shores and estate and lettings agents adapting very quicky to a new way of working. 

“I believe that a second wave of Covid-19 will entice more agents to re-evaluate the way they work, and we will see a third wave of agency gain momentum as a result” says Cooke. 

He says the first wave was characterised predominately by surveyors who also ran estate agency businesses in the local High Street. And the second wave was when the more entrepreneurial marketeers came into the industry, “some with prime and sometimes brash locations.” 

Cooke notes it is this second wave that has driven the industry for the past two or three decades, which is very much a marketing-led model of agency.   

“The third wave is where individuals will possibly work remotely and will be less reliant on a High Street office. However, they will work with an umbrella organisation that will provide them with leads, marketing, technology and the ever increasingly important compliance” he adds.

Cooke says this is similar to what The Guild does for its 800 members and what Fine & Country does globally in the prime market sector under its platform license. 

“Before lockdown there was already a growing trend in the industry of agents moving away from the High Street estate agency model and moving towards more flexible options that offered them the ability to work from anywhere, greater earning potential and the support of a network” Cooke continues. 

“If a second wave of Covid-19 causes further disruption in the market, more agents will be looking at their office set ups and ways to cut their overhead costs by perhaps having a central hub or shared office space such as WeWork. Technology has allowed agents to work remotely and the lockdown has proven it to be a viable option.

“The pandemic has forced the industry to embrace certain technology that until this year may not have been at the forefront. These days, every agent is more tech enabled and experienced at working remotely, which I believe could be the future of the sector.”  

He adds that the pandemic will continue to cause change in the industry well into the future. 

This post has originally been featured in Letting Agent Today.