Research by estate agent comparison site GetAgent.co.uk has highlighted the declining revenue of the average UK estate agent due to a reduction in transactions, largely driven by the industry-wide lockdown.
GetAgent looked at the average fee charged by estate agents and what the total potential value is when considering all residential transactions; it then compared this to market performance over the last year and five years.
In the financial year of 2015-16, the average estate agent charged a fee of 1.3%+VAT, equating to £2,622 on the average house price of £201,695, and £3,146 when taking VAT into account.
This fee has since dropped to 1.25%+VAT; however, with house prices reaching an average of £231,906, the average agent has seen income from each transaction climb by 10.6%, to £2,899.
An 11.8% reduction in transactions means that five years ago the 1,321,630 annual transactions within the residential market would have made the industry nearly £3.5bn in fees.
With the lockdown seeing agents restricted throughout March and April, and transactions plummeting as a result, this total value has seen a notable decline, with £86,373,744 lost in fees.
Between the 2018-19 and 2019-20 financial years, the data also showed that transactions have fallen by 1.9%.
While the average estate agent’s fee has still increased when compared to this time a year ago, the industry as a whole has seen revenues fall by nearly £25m where the fees secured on completed transactions are concerned.
Colby Short, founder and CEO of GetAgent.co.uk, said: “The property industry has endured a tough couple of months and the government’s lockdown of the market has had a notable impact on transactions and as a result, the revenue of many agents.
“This struggle is likely to continue over the coming months as we inevitably see a further reduction in transactions.
“The good news is not all agents are average and we’ve seen a monumental effort by many to adapt, evolve and in some cases, thrive in current market conditions.
“People still want to move and it will be those agents out on the front line helping them to do so that will remain relevant in an ever evolving industry.
“As ever these days, the best service will prevail and UK agents are really understanding that differentiator now.
“Many will have to knuckle down, manage overheads and potentially jettison branch offices.
“Some may also reconsider Rightmove as one of their biggest expenses.
“However, in recent years we’ve seen the industry survive the financial crash, pivot to fight against online agents and overcome months of Brexit uncertainty, and we’re confident we will see this resilience shine through once again.”