INTERVIEW: The ex-Foxtons high flyer leading Lomond expansion charge

Large corporate estate agency groups have enjoyed varied levels of success over the past forty years. The creation of such behemoths started with the hoovering up of agencies during the 1980s by financial firms like the Halifax and Lloyds Bank, and more recently the challenges faced by Countrywide, and its subsequent acquisition by Connells.

That grouping is now the largest concentration of agency brands within the UK operating some 1,200 branches and holding a 10% market share. But there is a new player in this corporate market, which has been on the acquisition trail since 2020 armed with City money and hoping to become a significant holder of market share within the sales, lettings and property management sector.

Lomond Group has acquired 50 or so estate agencies since launching, spending millions on the purchase of both small, medium and large firms across the UK from Aberdeen to Brighton, with almost monthly announcements of new acquisitions.

Perhaps its biggest coup was the purchase of Scottish sales and lettings agency giant DJ Alexander, making it the biggest industry operator north of the border.

Steering the Lomond Group ship, which has its headquarters in central London, is Ed Phillips who joined as CEO in July last year after a long stint at Foxtons.

The Neg sat down with him for a candid chat about his career, the group’s acquisition strategy and its future.

Have you taken the ‘Foxtons model’ to Lomond with you?

“Definitely because it’s become part of my DNA over the past 20 years or so. That includes working hard and going that extra mile and having a culture of reward and recognition, trying to always be one step ahead of the competition, always finding reasons to do things rather than not to, looking forward, dealing with bumps in the road effectively and ensuring you’re always relevant to the customer.

“I don’t think what Foxtons did was unique – the company just created a platform for certain traits, characteristics, and behaviours to be successful and people have been able to mirror that across the industry and the competition has to a certain extent, caught up.

“It’s about the evolution of our industry as a whole and not just in London anymore.”

How was Lomond created?

“At the end of 2020 Lomond was just 2,000 properties under management and a couple of PRS hubs plus the Yorkshire Linley & Simpson business already backed by LDC.

“And then, financed by them as our debt partner, we’ve been on a huge acquisition journey and we now employ over 1,100 people and operate across five regions managing 40,000 properties.”

What makes Lomond different from the other competing firms that ambitious estate agents have to choose from when looking to develop their career?

“That’s a good question, the answer to which I’m working hard to articulate both internally and externally because I feel that we are very different in our approach to estate agency. For example, if you take the franchise model [eg Belvoir] they offer a pre-packaged centralised support platform but once it’s handed over to the franchisee, it’s very much down to them to make it a success, and that’s why you tend to get performance inconsistencies from one branch or market to another.

“If you look at Connells/Countrywide it was always all about capturing as much high street market share as possible via brands like Bairstow Eves at the lower end and Hamptons at the top end.

“But with that model it’s not joined up and one danger of it is that lots of opportunities slip through the gaps because each brand operates independently. And there’s Leaders Romans Group as well, which, like us is looking to grow via acquisition – but there is not necessarily a distinct LRG blueprint that those agencies that are bought must adopt. “But what we’re trying to do is have all the single practices and systems in place as if we were a single brand across the UK but without losing the DNA and geographical nuances of why those businesses have been successful.

I want people to be excited to be part of the Lomond Group.”

“I often say our greatest strength is our centralised and decentralised model, but it can also be a challenge. I want all of our regions to have the autonomy and the understanding that what works in Scotland, for example, is very different and may not work in their region, but unite them all via a centralised CRM system. We also encourage people to share their knowledge and experience with colleagues from across the group. I want people to be proud to work for their brand, but also excited to be part of Lomond and have the two sit very comfortably together.”

How are you going to strike the balance between ‘corporate’ and ‘local’ that Countrywide arguable got wrong?

“The key bit is to ensure that we have a premium regional hub business and that when we acquire an estate agency it is integrated into that business – rather than having five or six acquisitions all competing against each other on their patch, and ensuring that each region has one or maybe two strong and powerful brands. Therefore, when we go and look for a new region to enter, we will identify the best available business that we can acquire, other than any clearly unavailable existing alternatives like say Knight Frank or Connells/Countrywide brands, and then see which is the best privately owned business with the best practices and a good lettings book. We will then make that agency the hub brand and use it to make the ‘spoke’ acquisitions of smaller agencies or lettings books – and ensure that the customer interaction is with just one brand.

“Lomond wants to avoid that issue of having a very fragmented regional collection of people and brands where no one understands what it means to be part of the larger group. That’s why across our six regions we only have nine or ten main brands.”

‘Spoke’ acquisitions will be business owners looking to exit the industry or retire?

“Yes, someone with one or two branches who wants to sell their business for personal reasons or offload their lettings book.”

Dexters famously doesn’t have a huge HQ – so will you be keeping yours slim? And where will talented/ambitious potential joiners fit into the structure?

“Either or really – if they want to start off in lettings or sales it will be in the regions and the same with our client accounting and property management functions Anything customer-facing is being kept in the regions – I don’t want to have what Countrywide had and have a huge call centre in Birmingham where staff tended to forget who they were answering the phone to.

“The perception that local knowledge and capability is key is important to our customers when deciding which agency to use but what we do have national marketing, finance, operations and HR hubs in London and Edinburgh and that’s how we power those regions. I want to take as much of the non-customer facing operational administration from the regions so they can focus on interacting with their clients and customers.”

You don’t appear to have operations or a regional hub, etc in London – why is that?

It’s part of the plan to move into the Capital – it’s where 30% of all transaction are in the UK. We have a Lomond investment team that we set up 18 months ago which is managing the 3,000 properties we already manage for Build to Rent clients, largely in London, but in terms of a hub in London we’re actively looking for the right business/brand to acquire that will sit best with the rest of our model in the UK. In London it’s about doing the right thing at the right time rather than just having a footprint for the sake of it.”

It’s about the evolution of our industry as a whole and not just in London anymore.”

You are owned by a finance business – the assumption would be that their overall aim is to build a big estate agency and then sell it?

“My role is to build the business and steer it in the right way for the long term but also deal with the direction of the board and shareholders – sometimes that can be at odds with one anther but yes, we are owned by a private equity firm.

“Anyone who understands about the private equity journey knows their aim is to realise shareholder return but also help the company find the next set of investors to take it on the next journey.

“But LDC is unusual because they are the Lloyds Bank private equity arm and don’t have such hard time limits to exit businesses because of the way they’re set up. We’re on the runway but there’s a long way to go.”

Ed Phillips – biography

After a BA degree in Law & Economics at Leicester University, Phillips joined Daimler-Chrysler UK (i.e. Mercedes Benz) as a graduate trainee in 1999 as part of a two-year graduate development programme, which saw him also do three months in different departments within the UK arm of the German car manufacturing giant. “That gave me the taste for customer-service and at the end of the graduate scheme I wanted to go into its sales operation but a lot of the established figures there were quite old compared to me and I wanted to try something fresh,” he says. 

So In 2001 Phillips switched industries, joining London estate agent Foxtons as a lettings negotiator, working his way up over the next 17 years to Chief Sales Officer in 2018. 

“Like many people who joined Foxtons back in the naughties I had seen the adverts and thought ‘why not give this a go’ and the rest, in my case, is history,” he adds. “I then left Foxtons for Lomond, which I thought was a pretty good stint but remember Foxtons was three very distinct companies during my time.That included the Jon Hunt, private equity ownership and publicly-listed company eras all of which were very distinct in terms of focus, behaviours and the way that the business operated.” 

Phillips ran the lettings side of the business for over a decade before he left, saying he eventually decided he wanted to tackle something different but not another London lettings operation. 

“I wanted something that was a [growth] journey, which Foxtons had embarked on many years ago in terms of development and sophistication, so Lomond felt like a fantastic opportunity,” he adds. 

He has also completed several London Business School courses.