I recently stumbled across a bit of a saga/debate/discussion/part-soap opera around self-employment within the estate agency field. Figures relating to earning potential were being bandied around, some income-related brags made and one firm suggested that individual self-employed agents can earn up to £64,000 more per year than fully-employed counterparts.
On this matter, Nested outlined that the average UK agent currently earns an annual gross income of £24,096. When they successfully sell a home, the average fee of 1.5% equates to £3,833 in commission, although the agent individually receives only around 10% of this as commission – so £383 per sale. It goes on to presume that the average agent sells 30 homes per year, making an additional £11,499 and pushing gross income to £35,595.
It further added that even in London, where higher house prices and a higher average fee (1.74%) mean more commission, the combined annual gross earnings from both salary and commission is £64,982. However, the company insists that a self-employed agent selling 30 homes a year at a 1.5% fee would instead pocket up to 100% of sales commission amounting to a gross income of £114,991. This has since led to a number of follow up stories around how much income some self-employed agents are said to be raking in.
From my perspective, these figures provide something of a simplistic view as there are numerous things to take into account such as insurance, accountancy fees, tax implications, pensions, sick pay, a variety of professional fees etc, etc. Although, it’s clear that there are many benefits attached to self-employment from a financial, flexibility and lifestyle standpoint.
This is evident in the growing self-employed numbers across the UK in recent times and the pandemic is also creating different forms of workforce trends as we have all – to some degree – revisited our priorities, outlooks and aspirations when it comes to our lives and career choices. Some people have been forced to take the self-employed leap due to employment related-issues and some have been encouraged to choose this path to fit their work around their lifestyle rather than vice-versa. Others have capitalised on some financial opportunities.
The employment landscape continues to evolve. Sectors and individual businesses which haven’t adopted some degree of flexibility in meeting the demands of their customers, clients and employees over the course of the pandemic may be left behind by those who have. Integrating flexibility into business plans and operational processes has become vital for businesses of all shapes and sizes and this has given a rise to the hybrid model of an employed and self-employed workforce. A force which is evident across the intermediary market.
Our self-employed arm SFC Solo allows advisers to trade independently but with the credibility and protective infrastructure that a directly authorised firm provides. This is a model which is proving increasingly attractive for highly qualified, experienced client-focused advisers who are looking to work independently and earn the lion’s share of income whilst still benefiting from a strong level of support. Especially for those who are looking to maximise the raft of opportunities which are being generated across the specialist markets in areas such as bridging, commercial and development finance.
At this point it remains prudent to point out that self-employment is not the right choice for everyone. However, it can provide the earning potential, flexibility and independency which can allow the right people to thrive and break free from their employed chains.
Daniel Yeo is founder and managing director at Specialist Finance Centre
