The Voice of the Agent 2024 Reveals How Prime Estate Agents Dominate the Market
We recently launched The Voice of the Agent 2024. You can download the full report here: https://tinyurl.com/thevoiceoftheagent. Be on Wi-Fi when you get the report, as it's a large file.
David and I will be producing a video based on the responses from prime agents - a 'prime cut' if you will, but one thing shouts out from page 47 of the report for Prime agents (defined as those with listings above £600k).
The data on typical sole agent fees provides a glimpse into the uneven pricing structure within the estate agency sector. The average fee across the board stands at 1.3%, showcasing the average price agents command for their services.
Notably, the fee structure is progressively higher relative to property value, starting at 1.18% for properties valued at £0k-£100k; the reality is the mainstream fee is more like 1.1%. Prime agents (£600k+ properties) command a fee of 1.6%, and super-prime agents increase to 2.5% for properties over £5 million.
The moderate fee rates for mid-range properties, maintaining around 1.1% to 1.18% for homes valued between £200k-£600k, indicate a highly competitive and price-sensitive market. Here, agents must balance the need to attract business against the value of their services, reflecting the dynamic nature of the industry.
The significant jump in fees from 1.40% at the £750k-£1m bracket to 2.50% for the £5m+ properties is a testament to the value proposition of prime agents. They offer a bespoke service for fewer clients, including extensive marketing campaigns, personalised client services, and potentially international reach, all of which justify the higher fees.
This data underscores the potential for prime agents. Despite having only 17% of the instructions, they secure a significant 46% of the total market value and an impressive 55% of all fees: more than half of all the fee income available for less than a fifth of the instructions. This trend continues with the super prime agents, who, despite securing a mere 0.2% of the instructions, manage to secure 5% of the total market value and a staggering 10% of all fees.
Prime agents also invest 32% more in marketing as a share of revenue, at 11.6% compared to 8.8% for their mainstream peers (pg 74). So, prime agents earn more money per property and then invest a larger percentage of that income in marketing.
With the average value of prime agent instructions being £1,141,079, over four times the £267,167 for mainstream agents, prime agents can significantly outearn and outgun their mainstream peers.
The same is true in lettings - more on that in the prime cut.
You can download the full report here: https://tinyurl.com/thevoiceoftheagent. Be on Wi-Fi when you get the report, as it's a large file.
Simon Leadbetter, Unchained.Marketing
