The guilded path to success
The Guild is celebrating 15 years in business and is set to roll out its growth plans, training up members while it returns to profitability
The demise of his affection for ladies shoes led Malcolm Lindley to the agency world 20 years ago. He spent the first chapter of his working life in the retail sector, firstly training with the John Lewis Partnership, then moving into the roles of regional manager for Peter Lord, the now defunct shoe shop network created by footwear giant C&J Clark International, and Southern regional operations manager for the group’s prime brand, Clarks shoes.
Lindley says: "I was interested in agency from a retailing, marketing and franchising point of view. I wanted to get into property. That was the target. I was sick of working in ladies’ shoes. "It’s quite good to change careers. I wish I’d done it more often in my life. It adds different chapters and experiences to life."
With his characteristically cautious approach to business and unshakeable work ethic, Lindley decided to immerse himself in the agency world as a negotiator before embarking on his own business venture. He worked for free on his weekends for around a year, for a Cambridge-based agency. Eight months later, he helped launch Property Relocation Services, and thereafter agency franchise, Agency no 1, which he later sold to GAN General Insurance Company - France’s fourth largest insurance company when it was acquired by its rival Groupama in 1998.
In 1993, Lindley and Bill McClintock, chairman of the Ombudsman for Estate Agents, founded The Guild of Professional Estate Agents, which he says he helped to co-fund with profits made through his own buy-to-let portfolio. He built this while working in the retail sector.
Their mission statement was simple: to create a network of independent estate agents that was publicly identifiable and significantly better than the existing agencies.
Lindley says: "Corporate agency was a big threat in 1991 and 1992 - it was flourishing while independent estate agency was having a difficult time. The plan was to create a network of independent agents to work together in direct competition, aggressively and defensively, against institutional ownership." Lindley says The Guild’s management board - which comprises Lindley, McClintock and Jon Cooke (more on him later) - took the decision to work only with one agency per town and planned to grow the network to 500 offices over three years. They started with three agency offices in Cambridgeshire, where Lindley lived, and 15 years later, the network, headquartered in London’s prestigious Park Lane, has more than 600 offices in the UK, with 175 across South Africa, Dubai, Cyprus, Spain, Portugal and the US.
Lindley claims to have launched the UK’s first property portal while growing The Guild. This meant scanning property details and uploading them on to the network’s site, which he says took around 15 minutes per property. He says his original plan of working only with one agent per town precluded him from developing a portal business, despite the obvious potential to do so. "We became much more concerned with building trust, confidence and credibility in estate agency practice," he says, "and at that time concentrated on developing a code of conduct that was approved by the Office of Fair Trading." Lindley’s launch plan also required all members to belong to either the National Association of Estate Agents or Royal Institution of Chartered Surveyors and pledged to provide professional indemnity insurance as part of the network’s service offering, which it introduced with effect from January 2007.
Other member services include a comprehensive marketing suite. The Guild has an in-house publishing studio, which produces a whopping 460 magazines for its members.
These are distributed locally, regionally and nationally. Lindley refutes the suggestion of it being a luxury in the current market, despite admitting that it is partially responsible for The Guild posting a loss last year, and insists that it is an integral part of the network’s service offering.
Meanwhile, Guild Professional Services offers members access to additional revenue streams through leads for repossessions, part exchanges and international property sales.
In terms of training, The Guild Associate Scheme aims to help staff and agents learn the basics of agency practice, covering law, regulation and the Ombudsman Scheme for Estate Agents while The Guild Academy runs a monthly training programme for new members, which lasts a day.
Lindley overhauled The Guild’s membership fee structure two years ago, introducing a oneoff monthly fee of £250. He says: "We used to charge a much smaller membership fee and then members would participate in all the other products. We then decided to integrate all the services into one package, to maximise the economies of scale the business could achieve."
Having established a core service package, Lindley is reviewing the performance of each service. The spotlight is on mortgage advice, which is currently supplied by The Mortgage Advice Bureau. But he acknowledges the difficulty in encouraging negotiator referrals to mortgage brokers, which he believes is an overhang from the 1980s, when financial services firms charged into the agency market to maximize referrals between their agents and product sales teams.
He says: "There would apparently be an easy connection between the two industries when actually, in practice, it is a very difficult connection.
When you go to buy a property you want to buy, you are probably stretching yourself financially, so the last person you want to talk to about your mortgage is the estate agency that you are trying to buy a property from - that is the nub of the problem. I think the more separated the two sides are, the better."
Fine & Country
Lindley is also busy developing Fine & Country, the premier agency brand he launched 2003, which aims to compete with high-end players, such as Knight Frank and Savills.
Lindley says: "There was a proliferation of top end agents and as property prices increased, they came down to meet a very lucrative marketplace, hence our decision to launch the new brand." Lindley believes that the brand’s unique selling point is its lifestyle marketing, which he says has until now been an area dominated by chartered surveyors.
A client interview, conducted by Fine & Country agents, forms the basis of a ‘lifestyle brochure’, which aims to convey to prospective buyers the experience of life in the property and the surrounding neighbourhood.
The average property price of the brand is around £1m, ranging from £700,000 up to £2m.
In addition to the UK, the brand has a market presence in South Africa, where there are 60 branches. An agency was also recently appointed in Koh Samui in Thailand and there are plans to expand into the US and Australia.
Lindley believes both The Guild and Fine & Country can weather the current market downturn. "I’m not saying it [Fine & Country] is recessionproof but it is certainly recession-resistant," he insists. Similarly, The Guild was launched into the teeth of a recession, so it is well-suited to these market conditions." Lindley adds that plans for every Fine & Country office to have a 10% share of its local market remains, despite the overall market downturn.
His growth plans for both brands are admirable but one wonders about his ability to retain the independent status of both, particularly given the involvement of Cooke. Cooke not only owns his own Bishop’s Stortford-based agency, Intercounty, but he is a also a director and stakeholder of The Guild [8.5%] and managing director of LSLi, the agency network business of LSL Property Services, which also has a stake in The Guild (15%). There are clear synergies between The Guild and LSLi, not least their raison d’être - to provide quality support services for independent estate agents.
But Lindley is quick to dismiss the suggestion of The Guild becoming part of LSLi. "That is not at all the plan," he says. "When Home Information Packs were first being bought into the marketplace, there was a problem, in terms of acquiring home inspectors. So, to protect my network, I made a tie up with LSL, which has a network of surveyors." Lindley expects The Guild to return to profitability this year. In the meantime, he and his team will continue to focus on growing the franchise and developing the educational side of the business, to ensure that its agents are in the best position to win business when the market starts to return.