Trading is “comfortably ahead of expectations” at Belvoir Group, the property franchise and financial services Group with its central office in Grantham, according to an update for the year ended 31 December 2021.

Revenue was up 36% to £29.6m (2020: £21.7m), a record level, and consequently it expects that the financial performance for the year, including profit before tax, will be comfortably ahead of management’s expectations. 

2021 was one of the busiest years in recent times for estate agency, with residential property sales transactions up 41% on 2020 and 22% ahead of the six-year average to 2019.

In addition to achieving strong growth in the underlying business, the Group expanded both its property and financial services networks through the acquisitions of Nicholas Humphreys, a specialist student lettings franchise, and Nottingham Mortgage Services, the mortgage arm of The Nottingham Building Society (The Nottingham).

Revenue from the financial services division increased significantly by 49% to £14.4m (2020: £9.7m), having grown the network of financial advisers by 20% to 243 (2020: 202), 17 of whom were advisers for The Nottingham. Financial services benefitted from the buoyancy in the residential property sales market throughout most of 2021, and towards the end of the year experienced a strong period for remortgage activity.

Revenue from the property division was up 27% to £15.2m (2020: £12.0m). The acquisition of the Nicholas Humphreys network added £2.2m from its 17 franchised and three corporate-owned offices. Having franchised out five of the Lovelle corporate-owned offices towards the end of 2020 as planned, £0.9m of sales and lettings fees were replaced by £0.1m of Management Service Fees and overheads were reduced by £0.8m.

Management service fees (MSF), the key underlying return from franchisees, was up 18% for the year to £10.7m (2020: £9.1m).

Sales MSF increased significantly by 56% to £2.5m (2020: £1.6m), with the extension of the stamp duty holiday ensuring that the residential sales market remained highly active until September. Thereafter, the market returned to more normal transaction levels with unfulfilled demand continuing to fuel house price inflation.

Lettings MSF increased by 10% to £8.2m (2020: £7.5m) of which £0.3m related to the Nicholas Humphreys acquisition and newly franchised Lovelle offices. The underlying lettings MSF increase of 6% reflected a strong lettings market. The demand for more space and a return of young people to UK cities as offices re-opened post lockdown resulted in insufficient supply of available properties to rent and as such rents on new tenancies were seen to rise by around 8%. 

Dorian Gonsalves, CEO, said: “All of the Group’s business units performed exceptionally well in 2021, ensuring that our franchisees and advisers were best-placed to take advantage of a strong property market. In addition, the Board furthered Belvoir’s successful growth strategy through two corporate acquisitions to enlarge our franchise and mortgage adviser networks. 

“With our significant recurring lettings revenue stream and our substantial financial services client base to draw upon during what is currently a strong market for remortgages, we believe the Group is well insulated from what could be a more challenging market in 2022.

“Given the resilience and diversity of our business model, we remain confident that we will continue to perform well relative to the market as a whole. Meanwhile, the Board continues to identify suitable acquisition targets to support continued growth and enhance shareholder value still further.”

The East Midlands is one of only two English regions forecast to close the economic gap to London by 2025 when compared to pre-pandemic performance, according to EY’s latest Regional Economic Forecast. The East Midlands economy, measured by Gross Value Added (GVA), is expected to be 9.5% larger in 2025 than it was in 2019 – the biggest increase among all English regions, ahead of the South West (9%) and London (8.9%). The UK’s GVA is forecast to have grown 8.3% relative to its 2019 performance by 2025. The East Midland’s robust forecast is in part thanks to the region’s resilience during the initial stages of the pandemic, with the region’s GVA declining by just 1.7% between 2019 and 2021. By contrast, UK GVA fell 3% over the same period, while London’s GVA fell 3.6%. GVA and employment in the region are forecast to grow at a similar pace to the rest of the UK from 2022 to 2025, with average annual growth rates of 2.7% and 1% respectively. However, the report sets out the scale of the task needed to level up the UK economy. While the research shows the pandemic has helped to narrow the UK’s regional economic divide, the gap between London and the rest of the country it set to grow again during the post-pandemic recovery. The capital is on course to regain lost ground to the East Midlands and South West beyond 2025 too. The report also forecasts that the economic gap between cities and towns will continue to widen, with England’s major cities expected to grow 2.9% per year by 2025, compared to forecast growth of 2.6% in towns. Simon O’Neill, office managing partner for EY in the Midlands, said: “The East Midlands economy has undergone a period of transformation in recent years, moving away from more traditional manufacturing to focus more on other sectors, including administrative support and services. While COVID-19 has undoubtedly had a significant economic impact on the region, the East Midlands’ mix of sectors has helped it weather the last few years better than other areas – and will set up the region up for a good recovery too. “The region is set to see strong growth in professional services and health, as well as a robust recovery in administrative and support services and the transport sector. The East Midlands has long been a professional services, science and transport hub – and the region’s laboratories and vast delivery and fulfilment centres have become all the more important over the course of the pandemic. “However, with the data showing London recovering from the pandemic more quickly than much of the rest of the of the country, action is needed to ensure places like the East Midlands don’t get left behind in the long-term. Greater flexibility on where people work, aided by the pandemic, could help things. Focusing on what attracts people and businesses to a region, attracting the right mix of sectors and job opportunities, and tackling issues that affect quality of life will be key to taking advantage of this. “As previous EY research has shown, the UK’s Net Zero and levelling up ambitions go hand-in-hand: the billions of pounds of investment required to reach Net Zero present a golden opportunity to transform not only the environmental sustainability of the UK economy, but its regional balance too. The manufacturing and utilities sectors, for example, are key to the Net Zero agenda – and they are vital to regional economies.” East Midlands locations set for average GVA growth Between 2022 and 2025, GVA in Nottingham is expected to expand by 2.8% per year – the only regional location above the average for the East Midlands (2.7%). Growth in the city is forecast to be led by activity in the administrative & support service and human health & social work sectors. Employment in the city is expected to grow at an average rate of 1.2% per year between 2022 and 2025. Locations in the East Midlands are expected to see GVA growth between 2.4% and 2.8% over the next three years. After Nottingham, the fastest growing regional locations are expected to be Leicester (2.7%) Mansfield (2.7%), Boston (2.5%) and Derby (2.4%). According to EY’s analysis, the West Midlands, North West and London economies were the most affected by the initial impact of the pandemic, with 2021 seeing the West Midlands economy recover to just 94.5% of its 2019 size, the North West’s economy reaching 96.1% of its 2019 size, and London recovering to 96.4%. By contrast, the Yorkshire and the Humber economy had reached 98.8% of its pre-pandemic size by the end of 2021, while the North East was at 98.5%. Relative to their pre-pandemic GVA levels, the West Midlands (up 5.3%), North West (6.8%), and North East (7.9%) are expected to grow at the slowest pace. The East Midlands is one of only four UK regions expected to see working age populations grow by 2025, alongside London, the East and South East. Sector mix key to long-term recovery Across the UK, service and city centre activities are expected to be the fastest growing between 2022 and 2025, with accommodation and food service expected to improve its GVA by 8.6% per year, followed by other services (up 6.7%), administrative and support services (up 5.5%), and arts and entertainment (up 5.4%). The transportation and storage sector is expected to grow 3.8% per year. By contrast, manufacturing is one of the sectors expected to undershoot the overall annual UK GVA growth (2.8%), with 1.7% growth forecast. Simon O’Neill added: “These sector mixes will dictate the longer-term recovery. The North East’s public sector helped the region’s economy weather the pandemic but may mean slower post-pandemic growth. Conversely, city-friendly sectors like digital, science and technology, and services will eventually bounce back, taking places like London and Manchester with them after a slow start.” Rohan Malik, EY’s UK&I managing partner markets & accounts, concludes: “Long-term ambitions and sustained, coordinated action are needed to balance growth across the country while ensuring that ‘levelling up’ isn’t simply moving activity elsewhere at London’s expense. The right actions now will bear fruit eventually, but policymakers need to be in this for the long haul.”