A story emerged in the property press this week that deserves more attention than it has received. Connells Group, the UK’s largest estate agency network, owned by Skipton Building Society and encompassing most of the Countrywide brands, recorded a loss of £500,000 in the first six months of 2026. The contrast with the same period last year, when the group reported profits of £28.4 million, is stark. A swing of nearly £29 million in twelve months, in a market that, as we have argued repeatedly in this column, is performing considerably better than the prevailing narrative suggests.
The explanation offered by Skipton’s Group Chief Executive pointed to a subdued sales market, a later than usual Budget, and political uncertainty weighing on buyer confidence. Exchanged contracts were down 7% year on year. The sales pipeline was 5% lower.
All of which is true, as far as it goes, but it does not go far enough.
writes Gordon McGuire
To understand what happened to Connells’ profitability, you have to understand how Connells makes its money. Estate agency fees are one part of it. But when the group was profitable, reporting £73.1 million in pre-tax profit for the full year 2025, that performance was described as being underpinned by higher mortgage activity, with arranged mortgages up 9%, and a 7% increase in survey and valuation volumes. The lettings division, meanwhile, proved more resilient than the sales side precisely because it generated reliable fee income independent of transaction volumes.
In other words, the profit was not built primarily on the quality of the estate agency service. It was built on the financial services infrastructure wrapped around it. Mortgage referrals. Survey and valuation income. Cross-selling at every available touchpoint in the transaction. When the sales market softened and transaction volumes fell, that infrastructure could no longer carry the weight of a business that needed it to.
This is not a criticism unique to Connells. It is a structural observation about a model that has become the dominant template for large agency networks across the UK, and one that is spreading.
What troubles me more than the corporate model is its quiet adoption by agencies that present themselves as something different. The high street consolidators perfected this approach over decades, acquiring brands, centralising operations, and offsetting thin estate agency margins with financial services revenue that clients frequently did not realise they were generating. The model was always more about the mortgage appointment than the sold board.
“What we are now seeing, increasingly, is supposed independents following the same path.”
“What we are now seeing, increasingly, is supposed independents following the same path.”
What we are now seeing, increasingly, is supposed independents following the same path. Local agencies, some of them well regarded, that have built referral arrangements with mortgage brokers, or even setting their own brokerage offering, taken relationships with preferred surveyors, and structured their businesses around revenue streams that have nothing to do with the sale of the home and everything to do with the transaction that follows it.
The client, in this model, is not purely a seller. They are a pipeline. A source of introductions, referral fees, and ancillary income that the headline estate agency fee does not begin to capture. The conflict of interest this creates, between the agent’s incentive to generate additional revenue and the client’s interest in receiving unconflicted advice, is rarely disclosed and almost never discussed.
Corum has been in business for over two decades. In that time, the market has changed considerably. The models around us have evolved, diversified, and in many cases restructured themselves around revenue streams that would have been unrecognisable to the estate agency businesses they once were.
We have not followed that path. Not because the opportunity was unavailable, but because we made a deliberate and considered decision about what kind of business we wanted to be and who we wanted to serve.
Corum has only ever taken revenue from one source. The clients whose homes we sell. No mortgage referral fees. No surveyor kick-backs. No financial services cross-selling dressed up as added value. When we advise a client, the advice is not shaped by what else we might earn from the transaction. It is shaped entirely by what is in their interest.
That is not a particularly complicated proposition. Yet, in an industry that has spent the better part of two decades finding increasingly creative ways to monetise the home-buying process at the client’s expense, it has become a genuinely distinctive one.
“There will always be a place in this industry for undiluted honesty.”
“There will always be a place in this industry for undiluted honesty.”
The Connells results are not, in themselves, a cause for alarm about the broader market. The market, as our own data has consistently shown, is performing well. What they are is an illustration of the fragility of a business model built on financial services scaffolding rather than genuine estate agency performance.
When transactions slow, the cross-selling slows with them. When the mortgage appointments dry up, so does the profit. The business that has built its margins on ancillary income rather than the quality of its core service has nowhere to hide when conditions tighten.
The business that has spent twenty years doing one thing, doing it well, and charging honestly for it is in a rather different position. Not because the market has been consistently kind, but because the model does not depend on it being so.
There will always be a place in this industry for undiluted honesty. In a sector that has become increasingly creative about where its money comes from, it turns out that clarity on that question is one of the most valuable things an agent can offer.
We have always known what ours is.