There’s good and bad in EG’s state of the agency market report for 2017. Whether engaging the next generation, tech adoption or diversity, for every pioneer, there’s a laggard. Too often the latter outnumber the former.
We haven’t ranked agents by turnover this time. Instead we asked agents of all shapes and sizes about their commitment to some of the biggest issues facing their businesses in 2017. Put politics to one side – and sidestep inflation and currency matters (identified by one agent as the real defining issues of the next several months) – the headline challenges that recur surround talent and tech.
On tech, the picture is moderately encouraging. The firms that responded to our question here spend an average of 3.6% of turnover on tech – not out of kilter with benchmarked spending in other industries. However, most declined to answer this question. Do they spend less? Don’t they know? Are they unwilling to declare their significant investment in this vital resource? I think it’s safe to assume it’s not that last one.
It is a similarly mixed picture on talent. Two-thirds of respondents plan to take on graduates this year, with a fifth taking on more than previously. Good news. However, on diversity the reality is less encouraging. There are plenty of great commitments to creating thriving, diverse workplaces, but too little disclosure around gender breakdowns. That is problematic with obligatory gender pay gap reporting just weeks away. Boardrooms are still overwhelmingly male.
Our intention is to showcase and celebrate the pioneers, not simply to criticise those who lag or are unable for whatever reason to declare their hand.
These are subjects we will return to.
• Speaking of the next generation, EG is delighted to support this year’s British Property Federation Tomorrow’s Leaders Awards 2017, which aim to find and celebrate the UK real estate industry’s rising stars. Awards categories include: innovation, inclusivity and collaboration. Entries open next week. In the spirit of celebration, we will take a closer look at the winners later in the year.
• Just where the government’s regional hubs will be located is preoccupying property minds across the UK. So far, much-coveted 25-year leases have been signed in Croydon, Bristol and Canary Wharf. As Canary Wharf Group’s head of lettings Richard Archer told EG last week: “It’s a bit like gold dust. You get the government covenant, on an RPI-linked lease. I can’t think there are many 15-year RPI triple-A covenant buildings around.”
With a further 12 regional centres and two London hubs to be determined, there is still plenty of gold dust as yet unsprinkled.
But the gold dust is not the real motivation behind the hubs: it is to reduce the cost of the government estate. Progress is being made. The total size of the estate is now 86.1m sq ft, a reduction of 3.2m sq ft since 2014-15. The number of holdings has fallen from 4,900 to 4,653; running costs have been cut by 7%, or £176m.
Yet this only scratches the surface. In 2015-16 the disposals programme yielded almost £1bn. Impressive, but £5bn over five years is the target. There is still some way to go.
• Banks have worried for years that they were heading for an “Uber moment” where technological advances spell the closure of hundreds of branches.
NatWest is among those staving off complacency, with a significant move to secure its relevance to the auctions market.
It pledges to provide a lending decision within 24 hours of applying for a loan. The bank aims to release funds within a month, down from the 80 days it typically takes today. Understandably, the standardised process would only be available to clients with a proven track record. It is a promise that has been well received in the market, but it might only be transformational if legals and valuations can be similarly speeded up.
• To send feedback, email damian.wild@estatesgazette.com or tweet @DamianWild or @estatesgazette
