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Northwood

Northwood is a specialist in the property industry, offering a full service residential lettings and estate agency offering with the additional benefit of insurance sales

£ 25,000 Minimum Investment

Northwood In Brief

  • Description

    Northwood is a specialist in the property industry, offering a full service residential lettings and estate agency offering with the additional benefit of insurance sales

  • Business Type

    Lettings & Property

  • Minimum Investment

    £ 25,000

  • BFA Member

    Yes

    What does it mean to be an official BFA Member?

About Northwood

Northwood was originally established by Andy Goodson as a residential lettings business — called Residential Lettings — in a small office in Portsmouth in August 1995. Goodson, a property developer with experience building new houses and retirement homes as well as dealing with land acquisitions and sales, began developing the company as a franchise opportunity in 1998 - he went on to sell the first residential lettings franchise, opening an office in Milton Keynes in 1999.

Changing the name to Northwood in 2002, the company rebranded in 2005 and, while continuing to specialise in lettings, it also added estate agency to its list of services.

The company grew to around 90 office nationwide and eventually Goodson sold his shares in 2016 and retired to Thailand.

Northwood was acquired by Belvoir plc, the largest property franchise group in the UK, managing in excess of 56,000 properties.

Northwood currently has 87 offices across the UK and employs over 400 people. Belvoir (founded in 1995) acquired three companies — Newton Fallowell, Goodchilds and Northwood — making it the UK’s largest property franchise group, with a total revenue of £11.3m. The company operates 300 offices nationwide and a portfolio of 58,000 managed properties. In 2018 Northwood acquired specialist mortgage broker Brook.

Phil Gee was promoted to managing director of Northwood in August 2018.

Northwood was a founding member of SAFEagent, a mark denoting firms that protect landlords and tenants money through client money protection schemes. It is a full member of the British Franchise Association (BFA).

What services does the Northwood franchise offer?

Most Northwood offices now offer both lettings and estate agency services, although the former still generates the bulk of the company’s revenue.

The key difference between Northwood and the majority of the lettings market, is its guaranteed rent service, which contractually guarantees landlords a fixed monthly rental income, even if the property is vacant or tenants fail to pay. Northwood, in essence, becomes the tenant of the property.

Northwood then sub-let properties through assured short-hold tenancy agreements at the higher market rate and manage all aspects of the tenancy, thus eliminating any risk that is normally associated with letting and guaranteeing the landlord a regular monthly income. Over 15,000 landlords use the Guaranteed Rent Scheme.

 

How does the Northwood franchise model work?

Norwood franchisees work within a specific territory, which is usually allocated on a postcode basis and, the company states, is significantly larger than the territory offered by other franchisors. The territory is normally generous enough for franchisees to open between one and three offices. Franchisees can purchase additional territories, should they wish to.

While Northwood franchisees may not have had experience in property-related businesses, it would be expected that they have had experience of working in large companies. All franchisees undergo a 10-year FSA-approved screening prior to being granted a franchise.

Northwood is accredited by The Guild of Letting and Management, allowing it to offer its franchisees a level 4 BTEC in residential property management. The course takes a year and is marked by the educational and examination body, Edexcel.

Operational support comes from operations managers under the guidance of Northwood’s national operations director, Phil Gee.

Franchisees will personally contribute £45,000 to £55,000 to get their business started, and there is an ongoing monthly royalty fee of 10 per cent of gross profits and a contribution towards national marketing of £400 + VAT per month.

 

What training does a Northwood franchisee receive?

The route to franchising with Northwood begins with a brochure and a Q&A. Once an applicant has been accepted, their proposed territory must be confirmed and a feasibility study carried out. Finance needs to be arranged and premises agreed.

Northwood offers a full five weeks of training which takes the form of a combination of residential, practical and online training, and work experience. Residential training is delivered in the relaxed surroundings of Northwood’s state-of-the-art training suite at the Northwood head office at Cams Hall Country Estate in Fareham, Hampshire.

Online training will introduce Northwood franchisees to the business of letting, while residential training will teach them about lettings, legislation and systems, estate agency and selling and accounts and using SAGE software. The work experience takes place at an established Northwood office.

National and local marketing will help Northwood franchisees grow their business.

 

What support will the Northwood franchisee receive?

Training for Northwood franchisees is ongoing via webinars, online, and through management and job-specific courses. Operations directors at Northwood will remain key contacts throughout the entire process, making certain that the questions and queries about accounts, legal and IT that will inevitably arise can be tackled quickly and efficiently. Strategic business support from senior management and regular audits will also keep the business heading in the right direction.

Franchisees will also have access to the Northwood intranet where they will be able to share ideas and news, and get advice and support. They can also attend Northwood’s bi-annual regional franchise meetings.

 

What advantages are there to buying a Northwood franchise?

Northwood describes the current property market as exciting and challenging. As an independent agent, you may be struggling under the combined pressure of the market, regulatory forces and competition. Northwood offers you a chance to join a network and share in the benefits of their expertise, efficiency and experience.

An in-house legal department and compliance department will help you navigate the over 140 Government statutes and regulations that apply to lettings. Northwood’s centralised accounting, systems and IT support have been streamlined over the 20+ years the company has been operating, allowing franchisees to concentrate on generating new business.

Northwood also offers additional, lucrative revenue streams. Its guaranteed rent service has been the cornerstone behind its growth, being a unique selling point for the business with generous margins compared to other lettings services.

Being part of Northwood will mean benefiting from a recognised brand, which the it promotes both nationally and locally through TV advertising, radio, online digital and PPC, generating 100,000 visits each month to its website.

 

What kind of franchisee is Northwood looking for?

Northwood believes that 95 per cent of its franchisees join the firm with no previous background in property. Finding the right type of person and training them thoroughly, setting them up meticulously and supporting them wholeheartedly, is Northwood’s philosophy. Northwood’s profit is not made from selling a franchise but from making the franchise a success.

Northwood is looking for people with:

• High personal integrity who can earn the trust of clients placing their property and money in the franchisees hands
• The financial acumen to manage the risks of empty properties and rental arrears
• Strong communication skills, as you will be dealing with a wide range of customers, including landlords, tenants, buyers, sellers and contractors
• Commitment—steering the fortunes of a small business you’ll need to get stuck in to the job and persevere
• The personality to be an excellent ambassador for Northwood, because it isn’t just a territory you are signing up to

 

What territories are available to a new Northwood franchisee?

While the Northwood network is growing — currently numbering 87 offices — there are still in access of 50 territories available within London and a further 100 territories available across the rest of the UK. These will be subject to a feasibility study to make sure they have sufficient households to support a profitable Northwood business.

 

What are Northwood’s terms of agreement and renewal?

Northwood offers a five-year franchise, renewable at the end of that period. Many of its franchise owners open more than one office, and if this is within the franchise territory are there is no additional franchise fee. Northwood states that 100 per cent of its franchisees renew for another term, so Northwood franchise resale opportunities are limited and should there be a Northwood franchise for sale, it is sure to be snapped up quickly.

 

Are estate agencies like Northwood in-demand right now?

The Royal Society of Chartered Surveyors (RICS) reported in July 2018 that the number of new properties coming onto the market had fallen for the eighth consecutive quarter. It has been suggested that this is due to the number of small-scale landlords exiting the market following the introduction of tougher tax rules in 2017.

Tenant demand, however, has not fallen, and the expectation is for rents to rise by up to 15 per cent by 2023.

With 93 per cent of the 1.5m landlords owning only a single property, many have neither the experience nor the time to manage a property for themselves. Add this to the fact that, allowing for inflation, house prices have risen by 152 per cent since 1995 while the average wage of 25- to 34-year-olds has increased by only 22 per cent in real terms over the same period, the proportion of under thirties expecting to never own their own home has grown by 60 per cent since 2010.

 

How do I apply for a Northwood franchise?

The first step towards a Northwood franchise begins with an application for a brochure. To find out more, or to request further information on franchising with Northwood, click on the ‘Send Enquiry’ button now.

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