This week, our experts addressed what effect losing a significant number of these estate agents could have on the broker community.
David Hollingworth, associate director of London and Country Mortgages, notes that in the present environment estate agents may be keen to ensure good relationships with mortgage brokers.
Jason Hegarty co-founder of Criteria Hub and director of Keystone Mortgages, argues that brokers need to be finding clients from a wide variety of sources.
Adam Hosker, director of Bespoke Finance, believes brokers need to become more technologically advanced, but have a long way to go.
Estate agents are at the heart of the homebuying process and will no doubt remain so. However, the advent of the online agent is bound to shift the dynamic to a degree and agents will no doubt adjust their approach to maintain their position in the marketplace.
Mortgage brokers will clearly need to consider the impact of changes in the agency marketplace on their business and how they generate their leads.
High street agents won’t disappear completely and those that have strong relationships and service levels are more likely to be the winners.
Having a good broker relationship for example will add additional revenue streams for the agent whilst providing a good service for its customers.
It’s therefore important for brokers to keep on delivering for those lead sources as well as they can, as it will be a vital element for agents if they face a squeeze on fees.
People will of course still be buying and selling houses and will rely on an agent of one type or another.
Adapting processes to align with those required by online agencies may be an option for brokers.
However, broadening the input of leads into the business rather than an over-reliance on single or limited sources is important and a lesson that many brokers will have learnt during the fallout of the financial crisis.
It will once again underline the importance of seeking referrals from clients and being sure not to neglect the existing customer base.
Looking after the needs of clients throughout their mortgage life rather than just when they are buying a new home will help develop a broader foundation on which to build.
It may seem obvious but apart from already understanding the benefit of the service, a review of their arrangements may only incur the cost of a phone call.
I don’t think it would generally have a major effect on most brokers, but if an independent broker is solely reliant on that one estate agent which closes then it is going to have a big impact.
But if the estate agent is doing enough property sales to fully service its own broker then it should be strong enough to survive.
The problem for estate agents is the costs of staying open are astronomical and if they do not have a lettings business then they have a bad business model. This can make it a struggle to survive even just one down year in the property market.
But the bottom line is brokers need to have a better client bank.
Our brokerage gets leads from lots of sources: estate agents, internet, customer referrals, and we also them buy-in.
As long as the adviser is established and getting leads from a variety of sources I don’t think a couple of estate agents closing is going to affect them greatly.
But if the broker is perhaps new and not fully established and reliant on one estate agent then they quickly need to focus on getting leads from other sources.
This could be an internet campaign, purchasing leads or building other professional relationships such as with accountants or solicitors.
If corporate estate agents are hit hard and have to close offices that could mean those brokers having to be relocated as well.
The in-house advisers or those with referral agreements may worry that classic estate agents are having a hard time.
Will that mean fewer introduced clients for them? Only if those same advisers are unable to adapt and replicate those arrangements with the online estate agents.
Unlike classic estate agents the next generation estate agents are looking for brokers with similar technological ambition.
This includes online applications and case tracking, along with APIs that integrate our case updates with their platforms.
With Mortgage Solutions poll showing that 40% of advisers do not have a website at all and a lot of the remainder have just a static website, we have some catching up to do.