New research by game-changing property platform, Boomin, highlights how lettings can provide a substantial revenue stream for the nation’s property agents as house prices escalate still higher and as deposits for first time buyers become ever more expensive, pushing would-be buyers toward the rental market.
When it comes to the sales vs lettings split across the UK property industry, the Boomin analysis shows that sales account for an estimated 53% of branches, versus a 47% market share for lettings branches.
With the sales market performing particularly well during the pandemic, it’s no surprise that sales revenues have climbed considerably.
In fact, Boomin found that between 2020 and 2021 LSL, for instance, saw the income generated from property sales increase by 47% versus just a 6% increase in lettings income, while Hunters saw a 54% increase in sales income versus just a 12% uplift in income generated via lettings.
Per branch, LSL generated an average income of £203,116 as a result of sales income, while lettings generated £175,637 per branch.
Hunters saw an average sales income per branch of £205,288, while lettings generated just £83,654.
However, Foxtons is proof that lettings can not only substantially supplement the income generated by an agent, but it can be the driving force behind their overall performance. In 2021, Foxtons generated £74.3m in lettings revenue, averaging £1.3m in lettings income per branch. In the same year, their sales revenue totalled £42.7m, averaging £748,649 per branch.
In 2019 prior to their 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.
Tellingly, therefore property businesses that do not also plug-in a lettings offering are missing out on an estimated £147,079 of lettings income per branch.
Michael Bruce, CEO and Founder of Boomin, says: “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, 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. Lettings as a focus creates a huge additional financial opportunity for sales only agents as house prices and deposits become further out of reach .”