The government’s National Insurance rise and drive for greater employment rights could push agents into adopting the self-employed business model, it’s claimed.

Sean Newman – founder of the Property Experts and a prominent advocate of agents going self-employed – says traditional high street agencies are waging war on two fronts as they face higher staff costs and increased competition.

“The 2% increase in employer national insurance contributions, the rise in the national minimum wage and the threat of additional workers’ rights will combine to put more financial pressure on traditional agencies. Some may think twice about taking on staff while others might even be considering job cuts in order to balance the books” he says.

“Rents and business rates are also going up as are property portal subscriptions. This is bound to lead to cost-cutting which means less marketing, less training, cheaper, less-experienced staff and a higher chance of redundancies than wage increases.

“I believe that many agents will see the writing on the wall and decide to move to self-employment sooner, when it suits them, rather than wait until they are forced into it.”

Newman says the self-employed model is now on a roll, with figures from the TwentyEA consultancy saying market share of exchanges through self-employed agents grew 8.1% in Q3 2024, while year-on-year growth was 22.8%.

He continues: “If you work for an agency and you’re a high performer, you must be considering what it would be like to build a business of your own. If you aren’t happy with your current earnings, it will have more than crossed your mind that you could earn more by selling fewer properties working for yourself.

“But if you run an agency and your best lister becomes a competitor, it will make things even more difficult than they already are.

“I believe it is just a matter of time before we see agents on the high street go the same way as travel agents. The benefits of being self-employed are becoming attractive to more and more agents.”

He says small agency owners should offer a self-employed model, scrapping offices and dropping the concept of employed staff.

And he claims: “If a business wishes to join a national network like The Property Experts, they won’t have Rightmove or other portal costs, no CRM costs either and we will provide the telephone answering service as well as marketing material, Acaboom, Homesearch and ValPal. The business owner will keep most of the income but the costs will be cut dramatically – much better than being left with next to nothing.”

Separately, a report earlier this week suggested that around a third of property professionals expect self-employed agency business models to make-up more than a fifth of the market within the next five years.

Graham Lock – chief executive of The Federation of Independent Agents – says his recent poll asking the opinions of property professionals showed that 16% felt that the share would reach between 1% and 5%; some 23% predicted 5% to 10%; while 30% went for a 20%+ prediction.

The survey leans towards a higher penetration of the market within five years with 61% of voters believing it will reach between 10% and 20%-plus.