A new survey of 6,000 nationally representative consumers aged 18 and over and commissioned independently by Zoopla, has revealed that there has been an upswing in market sentiment with confidence levels amongst agents up 55%.
Those surveyed reported that they feel either ‘very confident’ or ‘somewhat confident’ in the strength of the market during the next year. This follows a three-year consecutive decline in agent confidence, down from 79% in 2016 to 51% in 2018 – from the last market peak to the tangible slowdown that has characterised the market in recent years against a backdrop of protracted political uncertainty.
From a regional perspective, agents in the north are registering the highest levels of confidence in market performance for 2020 at 57%; meanwhile, agents in the south come in at 53% and demonstrate the highest turnaround in sentiment, up from 46% recorded 12 months prior.
Restoration of supply
Over half of agents (52%) expect to see an increase in the supply of stock coming onto the market over the next 12-18 months. This is a net increase of 20% since 2017, when less than a third of agents forecast a tangible uptick in the supply of homes being launched to market. Additionally, 45% of agents believe that there will be an increase in the number of property transactions that take place across the year ahead, in a further sign of renewed market health.
Diversification of revenue
As a continuation of improved confidence in market performance in 2020, traditional agency offerings are expected to deliver an uplift in revenues for the year ahead. 54% of agents expect to derive increased income from property management fees, 50% from property sales and 45% from lettings fees in 2020.
The report also signals that agents will continue to benefit from diversifying their revenue streams and that securing relationships with third party suppliers bolsters the core business proposition. 43% of agents believe that there is scope to increase earnings by recommending mortgage lenders or brokers, and 42% by recommending legal services.
Greatest market challenges
The economic and political landscape, as well as current stock levels, were cited as immediate market challenges; however, the subsequent election outcome and purported ‘Boris Bounce’ have already begun to reshape market dynamics.
Instead, there remains a tangible nervousness around prospective legislative changes for the year ahead, with 47% of agents unclear on the realities of the new government’s housing policy.
Meanwhile, the pressure to lower fees and discord around Stamp Duty penalties are affecting business performance for just over a third of agents (39% and 37% respectively) – the latter likely to be the subject of much discussion in the lead up to the Budget on 11th March.
Keeping up with technology and an expertise in digital marketing is posing a challenge to a quarter of agents, as the industry evolves and consumers demand new services and methods of interaction. With 2020 expected to mark a new ‘techade’ of innovation for the industry, much attention has been directed towards what’s next and how it can best serve and enhance the traditional estate agent offering.
Andy Marshall, Chief Commercial Officer at Zoopla, explains: “The annual State of the Property Nation findings always make for a compelling insight into all facets of the market. In the first of our series of takeaways, the study provides a barometer of agent mindset, and our findings show, on the whole, that agent confidence in the market is on the up for 2020.
“It comes as little surprise that the so-called ‘Boris Bounce’ has already started to reshape the market in the immediate term – particularly amidst reports of improving consumer confidence following the decisive election outcome.
“Without doubt, appetite to buy and sell property has been pent up since the aftermath of the Brexit vote in 2016, and it would now appear that we have the green shoots of a new cycle in the market. While we don’t expect runaway prices – indeed we have forecast a modest 3% growth for 2020 - we are definitely heading in the right direction and agents are rightly benefitting from what we hope will become a new dawn.
“It goes without saying that we harbour much responsibility for the shape of the market for the year ahead, and we’re doubling down on all efforts to ensure that Zoopla continues to deliver outstanding levels of valuation leads and leads per listing for agents during the next 12 months.”