Belvoir Group reports brisk trading in lettings but 24% drop in sales transactions
Industry corporate says increased rental transactions mitigated the drop in number of homes coming to the market as sales 'normalises'.
Recently-rebranded franchised estate agency operator Belvoir Group has reported brisk business during the first four months of 2022 including group revenue up by 14% on 2021.
The firm has some 300+ branches in the UK operating via franchises including Belvoir, Newton Fallowell, Northwood, Lovelle, recently-acquired hybrid agency Mr & Mrs Clarke and Nicholas Humphries.
Its latest results reveal why so many big agencies are trying to expand their mortgage and insurance division – while Belvoir Group’s property division activities grew by 8%, financial services leapt by 20%.
Also, Management Service Fee (MSF) income, the group’s key underlying income stream from its property franchise division, is up 1% on 2021.
Belvoir says this is partly down to the sales market normalising – transactions dropped by 24% year-on-year during the reporting period, although lettings picked up.
MSF from lettings increased by 4% mitigating the 11% lower level of MSF from sales.
“We have continued to focus on the group’s growth by supporting our franchisees and advisers to ensure that they are best placed to respond to the market conditions, and furthering the Group’s ambitious growth plans through two strategic acquisitions,” says Dorian Gonsalves, CEO of Belvoir Group (main pic, bottom left).
“With the brokerage model growing within the estate agency sector, the key strategic driver for the acquisition of Mr and Mrs Clarke was to introduce a high-quality personal agency model to the Belvoir Group to complement its existing high street brands.
“The Board remains confident that its business model and growth strategy present a strong investment case for shareholders and deliver enhanced value for all our stakeholders.”
From an analysis we did recently and it was only a 1,000 agencies, sales transactions were collectively down by 19%. If this trend continues or accelerates, this is close to the operating margin of many SME’s. If less people are going to move, and Purplebricks saw a 31% drop in instructions year on year, agencies will need to be more efficient, and a good way to start is to scale up digital solutions to allow the sales teams to perform at a higher level.
Property technology companies are simply providing the digital hand tools that agencies need to scale, make more profit and better communicate with their digitally savvy clientbase. Maybe it is time more agents started the conversation with these software companies who want to ‘help.’