For many estate agents, the security of a consistent income is an important part of their professional remuneration - it’s good to know that you’ve got a base-level salary coming in every month, plus everything that can be earned through commission.
However, analysis by Nested suggests that this security benefit isn’t actually all it’s made out to be. That’s because data shows that the nationwide average base salary for residential sales agents in the UK, including those on both the agency side and development side, is £32,050. This is -44.3% below the overall median salary in the wider UK real estate industry, which currently sits at £57,500.
Compared to agent base salaries in other nations, this means UK agents are better off than those in Asia who earn -53.3% less than the continent’s wider industry average. But it also means that UK agents are, relatively speaking, worse paid than their counterparts in South Africa (-33.3%), Europe (-23.5%), and the Middle East (-2.8%).
Back in the UK, residential sales agents who work on the agency side are the worst-paid of all property industry professionals with base salaries averaging just £30,100.
This puts them behind agents working residential sales from a development side (£34,000), support & administration staff (£34,000), and residential lettings agents (£35,000). It puts them even further behind the likes of facilities managers (£45,000), quantity surveyors (£55,000), and human resources staff (£83,300).
Alice Bullard, Managing Director at Nested, commented: “The obvious incentive for agents in both sales and lettings is commission - this is why they’re willing to accept such low base salaries.
"But if commission is the most important thing, why do so many agents still value working within the traditional agency model in which the agency brand they work for takes such a significant slice of their commission?
"The probable answer is security and market exposure. You might earn more by being self-employed and keeping 100% of the commission, but the base salary offered by big agencies removes some of the pressures that come with being a sole trader, while the brand exposure they provide, in theory, makes it easier to win new business.
"But it’s a costly trade-off: employed agents typically retain only 5-15% of their exchanged commission versus 75-100% on the best self-employed models.
"That’s why Nested have entered the market - we provide a middle-point between agency and self-employment. Agents get the financial incentives and work/life freedoms of going it alone, while also benefiting from a firm foundation of having a supporting team and platform behind them, as well as, uniquely with Nested, financial support to help get their business off-the-ground.”
