Research by leading online estate agent, eMoov.co.uk, has released its latest update on high-street estate agent fees, highlighting the extortionate rate they continue to make as a result of escalating house prices and their dated commission based model. As well as how their hourly rate compares to much more respected and hard-working professions across the UK.
High-Street Earnings in 2016
We looked at the average house price across the UK, coupled with the number of transactions during 2016 and found that high-street estate agents profited to the tune of £408m during the last year based on the average high-street fee of 1.6% plus VAT. That’s an average fee per a property of over £4,000.
The number of property transactions in the UK has increased steadily since 2012, up 26%, with the average house price increasing at the same rate in this period. As a result, high-street agents have also seen their profits boosted, despite no additional service offered or justification for what is already a dated and anti-consumer proposition.
Earnings Per an Hour
With the average property taking between five and 15 hours to sell, high-street agents across the UK are lining their pockets with as much as £815 per an hour, climbing to £876 per an hour in England alone.
Despite there being no barrier to entry in the profession, an abundance of hidden fees and contract tie-ins, as well as a severe disregard for consumer interest, the high-street estate agent still earns more than some of the nation’s most hard-working professions.
At around £42.50 an hour, an NHS doctor will earn 19 times less what a high-street agent can pocket in the same time, with even private doctors having to work three hours to equal a high-street agent’s hourly fee.
A solicitor will have to put in four times that of an estate agent with an hourly fee of £201, whilst a dentist will have to work for 16 hours at their hourly fee of £51.51.
Even manual skilled professions require an abundance of training before you can qualify, but an electrician (£18.35 an hour) and a plumber (£17.75 an hour) will have to work more than 40 hours each to match the hourly fee of a high-street agent.
Despite putting their lives on the line, an infantry soldier in the British Army would have to work almost a full day (19 hours), to make the same amount as an estate agent can in one hour.
We make a point of highlighting every year, that whilst house prices and transactions climb, so does the money made by high street estate agents, due to nothing more than their stale, commissioned based fee. If anything, the service offered by high-street estate agency has steadily declined as the lack of barriers to entry have facilitated every man and his dog setting up a branch, with no real regulation on how they behave or treat the consumer.
That’s not to say all high-street agents are bad, there are in fact some very good ones, as well as those that don’t charge as much as the average 1.6% plus VAT in fees. But unfortunately, there is still an abundance of those with a severe lack of moral fibre who get away with charging much more for no additional benefit.
The emergence of the online and hybrid sector is slowly changing that but until it becomes the norm, and it will, the UK home seller will continue to be held to ransom by high-street agents that know how to pull the wool over the eyes of both buyer and seller.
The emergence of the online sector and property portals such as Zoopla and Rightmove means that now a property can almost sell itself. But to think that despite this, there are high-street agents across the UK netting 19 times more than a hard-working NHS doctor, is a little bit sickening really.Russell Quirk