New Property Industry Opens Up Flexible Franchise Opportunities

Increasing numbers of franchise opportunities are becoming available as the new industry of Property Trading expands and matures. As a niche service, Property Traders offer quick and guaranteed sales typically at 10-20% below market rate, to home owners who wish to sell quickly. It currently handles less than 0.2% of property transactions and is growing rapidly. This is the estimate of Steve Hooper, co-founder and CEO of Fairdeal Homes, a key player in the market. A number of the larger companies are using Franchising to support this growth. As Hooper says, ‘we have seen a large growth in the demand for this service and are using the franchise model to capitalise on this momentum, thereby opening up a range of new opportunities in the property industry across the UK’.

A new type of franchise opportunity

For those looking for franchise opportunities in the property market, Property Trading offers many benefits, including flexible hours and the opportunity to build a buy-to-let portfolio. Franchisees make money by using their funds to buy properties, which they then rent back to the seller, sell after cosmetic works or rent on the open market. By working from home there are limited upfront investments as there are none of the costs associated with launching a high street branch. This is supported by Nick Gittins, a franchisee with Fairdeal Homes based in Chester: ‘After working as an estate agent for 10 years, becoming a property trader has given me a lot less working hours. I am my own master and do not have the hassle of looking after staff.’

Feeding the property market

Contrary to some perceptions this is not all about buying from people in financial difficulties. There are many other reasons why homeowners are prepared to sell at a discount: a hassle-free relocation, to break a chain, or to free up cash for an investment. At one company their largest customer group, 37%, are people looking to relocate quickly, whilst less than 10% are people wanting to avoid repossession, or with urgent debts to clear. As Mr Cameron, a recent seller from Nottingham puts it: ‘I chose to sell my house to Fairdeal Homes as my wife and I had already moved and wanted to focus on our new property. As a businessman, I recognise I was selling at a discount, but for me this was worth it to avoid the hassle of selling in the normal way.’

Whatever the reason, Property Trading companies offer a solution and service that would otherwise be unavailable. Carl Drinkwater, a corporate director of LSL Property Services (owner of Your Move) states: ‘Property Trading companies provide a specific service that a small number of sellers need or want. From this perspective I feel that they have a long term place in the market.’

The property trading industry will inevitably evolve as it matures. It is already working alongside more mature property services like estate agency. Far from competing, Property Traders feed the market by re-selling properties through agents that would not necessarily come on to the market. Equally, many properties purchased by Property Traders are rented back to the seller or rented out, through the letting agents. And it’s a reciprocal arrangement, with larger Property Traders referring customers to estate agencies or re-mortgaging companies when this is appropriate. This synergy is an indicator that it can create sustained value in the property market and has a place to fill that is unlikely to evaporate in the near future. Drinkwater admits: ‘if anything, when working with Property Traders, I have found they are complementary to us, bringing additional revenue as they use our services.’

Written by 

Alex Wilson: Alex, a former tech industry executive, writes about the intersection of business and technology, covering everything from AI to digital transformation.