PrimeResi meets the duo behind The London Broker – a collective of over 20 independent agents, including some high-profile PCL operators – to discuss their US-flavoured business model, the importance of experience, and why so many top brokers are opting to break free from the corporate shackles…
Your roster includes some of the best-known agents in London and further afield; what do you think has attracted them to your business model, instead of the big-name firms?
Independent brokers love the freedom of working in whatever way they want to, to best look after their clients and fill their days efficiently. They also like the knowledge that they can work with other like-minded and capable, experienced brokers who “have their back” – this collaborative approach sets The London Broker apart and brings benefits including referral work across a global network that the independents may never have had the opportunity of had they been on their own.
What are the major differences clients will notice between dealing with the London Broker and a traditional high-end property agency?
Our brokers are all self-employed so they are fully motivated on all their instructions to deliver an exceptional personal service for their clients – whilst not having big teams to pass to less experienced individuals. Their own reputations have been built over many years and they protect them by working extra-hard; utilising cutting-edge facilities that The London Broker provide them to empower them to compete at the very highest of levels with confidence. Each broker is selective of the business they agree to list and take care to make sure that they deliver results for their often repeat clients.
A number of hub-based agencies have sprung up of late, promising high levels of commission and flexible working structures; do you think freelance is the future for estate agency, or will there always be a place for high street operators?
The great thing about the significant movement away from the high street corporate businesses now – and I suggest the coronavirus pandemic will only increase this – is that this offers a greater choice to consumers and a choice of different styles of agency. If you don’t want a “sausage factory” or “one size fits all” approach then you can go for a much more personal bespoke service with a “one-man band”. Over the last five years, there has been an increasing trajectory of agents escaping the shackles of large organisations for a more flexible and less routine work/life balance; often setting up as buying agents initially.
While I was running the Strutt & Parker London residential team, we saw our market share eroded by new nimble businesses arriving in our prime central London marketplace and winning business away from the more traditional companies. The fragmentation of estate agency has continued apace to the point that there are as many sole traders as there are in corporate teams. The problem comes for clients when they try to find & then differentiate between sole traders who haven’t necessarily got the brand presence or profile of the large corporates. Individually they may well be more capable that the larger teams but being introduced to them through personal introduction may be the only way to hear about them. This is where we really want to make a difference with The London Broker; providing some of the best traders in the market, with a minimum of ten years experience each, becoming a collective portal for clients to seek real experts and trusted advisers they can rely on.
The broker approach is well-established in international markets; how does the London Broker differ from, say, the American model?
Like the American model, we enable and encourage our brokers to grow their own personal brands alongside The London Broker brand-name
There are no other models in the UK that provide such experienced brokers the opportunity to work collaboratively with other such exceptional individuals as we have curated on own our “invitation only” technology and marketing platform. Like the American model, we enable and encourage our brokers to grow their own personal brands alongside The London Broker brand-name. We positively encourage this collaborative approach because we believe in valued partnership and helping one another. Together, we have a strong value approach that is rigorously adhered to and the Board has the ultimate ability to remove any broker should anybody not live up to the high standards expected. In many ways, I would say we are turbo-charging the American model as we believe that this is the best way to deliver the most exceptional experiences and results for our brokers’ clients.
Technology has and is transforming the way properties are marketed and deals are done; which innovations do you think will have the biggest lasting impact on your business in the next few years?
The constant innovation in technology in particular prop-tech is astounding and I am sure it will continue to develop bigger and better solutions over the coming years. Coronavirus no doubt has fast forwarded the adoption of virtual tours over the last few months. We were already using them at the brokerage but regularly use them now on our listings and we find them very useful not only in cutting down on the number of wasted viewings our brokers do, but also in keeping overheads low, so we expect this to continue to improve and form a major role in the business over the next few years.
With the spread of our brokers around the country and indeed the world, video conference calling will not just be a passing fad which will fade away once the virus subsides. We will continue to adopt it as a weekly communication tool to enhance the relationships within our broker network which in turn will no doubt increase opportunities for us and our brokers.
I have a nagging suspicion that we are about to see a bit of a rebellion against this constant march of technology, in particular the collection of data on peoples homes
The property focused research and information tools are also improving which helps our brokers research properties they are either looking to purchase for clients or indeed value on their client’s behalf. That being said, whilst technology is a corner stone of how the brokerage operates, I have a nagging suspicion that we are about to see a bit of a rebellion against this constant march of technology, in particular the collection of data on peoples homes. Consumers are becoming increasingly aware of the data that companies collect on them and property data is no different. In particular at the higher end of the market clients are often choosing to sell their properties “off market” not just for the traditional reasons, but also because they know that the moment their property is listed a record is created that is very difficult to erase. This can become particularly problematic in tougher markets where buyers will use “time on the market” and historic pricing information to negotiate with a vendor.
As an industry (and also as a nation) we have become used to tracking house price data as if it’s a stock market but unlike stocks and shares this data is very personal, especially when historic image or video footage is held on a searchable database such as the portals are increasingly offering. If this change of attitude does happen, whilst it might make it a little harder to research house prices for clients, it will mean that having a network if highly experienced brokers with significant black books of contacts will be jolly useful.
We understand that ultimately the human being is an essential part of the sale/letting process. The emotional intelligence of our brokers combined with their knowledge and experience helps to secure the instruction, negotiate the deal and see it through to completion, so any technology that comes along needs to enhance the consumer experience and complement our brokers abilities rather than try to replace them at a fraction of the cost, we all know where that ends.
Which territories do you have covered, and are there any other important locations you’d like to add to the list?
Whilst our name is synonymous with London, this isn’t limiting our offering to purely within the M25. In the same way that LA Fitness isn’t just in LA but global, we don’t see our name as a hinderance to geography but more an expression of where we launched our focused approach from this exacting metropolis that is renowned globally for its properties as well as its service and world class standards. So far, our brokers are focused across the home counties and abroad in Cape Town, St Tropez and the Greek Islands.
What is exciting is that where our clients have property interests, we aim to facilitate our offering either within our group of brokers or through the network we are fortunate enough to develop through our exceptional brokers contacts. Importantly, our aim is to focus on “best in class” properties to complement the level of broker that we are lucky to have on the platform, but that can still encompass properties ranging from houseboats to palaces!
Which services are offered and how do you prevent conflicts of interest amongst those buying and selling, and working similar patches?
We offer the typical sales and lettings services of any agency, but our brokers also can source and purchase properties for their clients, however our brokers often have long standing relationships with their clients, which more often than not puts them in the role of consultant or private client advisor, acting on the clients behalf for all their property matters. Of course we have a strict rule where our brokers may only act for and take a fee only from one party in any transaction.
I have always had a firm belief that people do not network on a geographical basis but on a personal basis
With regards to patches, as you may have noticed we don’t operate on the basis of territory like some other similar models do. I have always had a firm belief that people do not network on a geographical basis but on a personal basis i.e. friends, family and so on. As such to date our brokers have not yet been in a position where they have had to “pitch” against one another, but if such a situation arose, we know that they are adults and will do what’s best for the client.
Do you have a standard fee structure, or is that for each broker to decide?
We do not have a standard fee structure, it is for each broker to decide how their run their business… however we hope that by being part of a brokerage of leading independent brokers with the best possible tools at their disposal to enhance their service that perhaps they can justify a little more than perhaps they might if they were on their own.
Rupert, you previously founded The London Management Company; what gave you the idea for the London Broker and can you briefly talk us through the journey so far?
After I sold a majority stake in The London Management Company, I was still involved in search and acquisition work, which I continue to do today. It was whilst doing this that I started to notice a number of high profile names leaving some of the major agents. Having witnessed what happened in 2008/9 I had always felt that independent agents (estate agents or buyers agents) would always have a louder and more influential voice if they joined together and spoke with one voice rather than all shout separately like dogs barking in the wind.
One thing I appreciated from my experience in setting up TLMC, was that success is about timing, by which I mean that you can have a great idea, but if the timing is off it may never get off the ground.
Of course there are examples of the ‘US-style’ brokerage model being tried in the UK a number of times in the past, but for some reason it never worked. Things are different now, most notably the way in which society views self-employment and how technology enables individuals to take the leap required to become self-employed is more prevalent than it ever has been before (even before Coronavirus).
When thinking about how the model might work, I spoke to a number of high profile agents and it became clear that the financial model needed to be much closer to that of a SaaS model than that of traditional agency, in particular when it came to calculating the fees brokers would contribute to the brokerage as a whole.
I spoke to a number of high profile agents and it became clear that the financial model needed to be much closer to that of a SaaS model than that of traditional agency
Whilst it‘s been fun pulling together all the tech, perhaps the most enjoyable bit of the journey so far has been the people. Our entire industry is built upon the relationships people forge with others, be they colleagues, buyers, vendors, tenants or landlords. Getting the people right was essential from the start and I have been very lucky to be able to attract some pretty epic names, not only including Mr Willis here, but also the likes of Johnny Turnbull and Charlie Noel-Buxton, all vastly more experienced that I am and hugely respected in the industry, which in itself has enabled us to attract some of the other superb and well respected brokers that we have and who form the base of the brokerage today.
I should add that I have been lucky to have been ably supported by Alexander Vine, who’s knowledge of agency systems and process has far outstripped mine and without whom we would almost certainly have come unstuck relatively early on. But of course this is the point of the brokerage, that although we are all independents we all pull together in order to benefit each other and collectively are stronger and I am delighted that so far its working, and this is only the beginning.
Charlie, you were one of Strutt & Parker’s top agents for many years; is there anything you’ll miss from your days in the corporate world?
After 6.5 years at Foxtons, I had an amazing 18 years at Strutt & Parker meeting and working alongside and for many phenomenal people. I was also lucky enough to have been involved in over 700 sales, many of which were very special homes, many of which are etched in my mind. I learned a huge amount about estate agency and team building, with my biggest wrench ultimately being leaving my team and fellow Partners behind. As a legacy though, I know that they are a brilliant team who continue to transact some of the most phenomenal transactions. But it was time for me to refocus and do something different as I saw a change in the market that I didn’t feel within the corporate that we had become, that I was able to influence quickly enough the change I thought was needed.
In corporates, the brand is always bigger than the individuals
One of the key attributes of estate agency has to be remaining nimble with an ability to move with the times and change the service appropriately for the customers you serve. With my own estate agency business “Charlie Willis London” I can help clients personally while through The London Broker platform I can help more independent brokers improve their profiles and deliver amazing results for their clients too. In corporates, the brand is always bigger than the individuals – while at The London Broker, we want to support brilliant individuals and grow them, letting individuals use their professional experience to deliver the best possible outcomes for their clients. We don’t dictate how they operate but purely provide the tools to enable and empower them to act professionally and legally. The management time we save in not having to deal with HR matters and internal politics, leaves us to support our brokers and let them concentrate on spending 95% of their business time on looking after their clients.
Can you give us a flavour of the instructions you have on your books right now?
We have an array of listings, from a £15m house in Chelsea to a small studio apartment in Battersea, from a four bedroom penthouse in a 19th Century Gothic Mansion, to a two bed apartment in a new build development. One of the purposes of The London Broker is to give individuals a place to display the array of stock they may attract as a result of their varied network of clients, and to give them the platform to attract buyers and vendors from across the globe. The excitement of our platform is that we have access to an unusual array of different property listing types and most of our brokers, with their experiences, also have access to a lot of off-market property too.
Most of your brokers have spent many years in the industry; apart from experience, which key attributes do all great brokers share?
Our brokers all share a passion for the industry and an entrepreneurial flair. It is not easy regardless of experience to step away from the safety of their larger corporate homes, especially those who have been embedded within some of these firms for decades. It requires perseverance and a generally upbeat positive outlook.
Our brokers are also well connected, their decision to branch out on their own is often supported by their confidence in their black book of contacts and their ability to create appropriate solutions for their clients. It has been remarkable to see how willingly our brokers share contacts and reach out to their networks in order to find buyers / vendors in order to broker deals of all shapes and sizes.
It’s been challenging time for property agents and agencies, to say the least; what are you both seeing in the market at the moment, and do you have any predictions for the short- and long-term?
Once the lockdown was eased for the agents, we saw a flurry of activity, pent up frustration encouraged movers to get out and about and follow up on all those properties they’d been eagerly browsing whilst cooped up in their homes. In particular larger properties with gardens attracted attention, as well as stock from our out of London brokers was particularly popular, as was some of our lower end stock, where FTB were keen to get on and buy, properties which had seen little interest prior to lockdown even attracted asking price offers. However this initial boom in activity has somewhat subsided of late as buyers perhaps take stock of the potential economic impacts of coronavirus become more prominent.
As the media cycle moves away from daily reports on the virus, they are now increasingly reporting on economic data, including job losses, which may make people a little more cautious. That being said people will still need to move and there will be few hurdles in their way, so long as vendor and buyer expectations can be managed, it is not 2008, but neither is it 2014. Even yesterday, Boris Johnson was highlighting the importance of and lack of quality housing with his “build, build, build” mantra, which just underlines just how critical homes are to our society and how the undersupply of quality properties remains a challenge for this and generations to come.
Having the right balanced advice from experienced brokers in whatever market is always key.