Franchised estate agency giant Belvoir says the impact of the tenant fees ban will be less than it had initially expected and will reduce its gross profits by 6% initially, and then by just 3% after nine months.
The company had initially predicted an 8% reduction after the tenant fees ban comes into effect on 1st June this year.
This upbeat prediction is within the company’s full-year results for 2018, which overall reveal revenues up by 21% helped by increased fees from its sales and lettings franchisees and a 20% increase in revenue from its financial services division.
Belvoir is benefiting from a long-standing industry trend; franchised estate agents tend to do better during tough trading periods. Fees paid by its franchisees increased by 7.1% and its branches outperformed both the UK’s sales and lettings markets.
Underlying revenue growth within the company’s lettings operation was 2.6% during 2018, more than the national figure of 1.8% while sales revenue increased by 8.5% against a backdrop of national transactions dipping by 2%.
But like many large estate agency groups, Belvoir is relying heavily on its financial services operation for most of its growth. Brook Financial Services, which it bought in 2017, alongside recently-acquired broker MAB, helped increased its revenues from selling mortgages by a fifth.
“In 2018, Belvoir delivered on its promise to support franchisee growth through its Assisted Acquisitions programme, adding network revenue of £6.9m, ahead of our £6.6m target for the year and over double that achieved in 2017,” says CEO Dorian Gonsalves (above).