Online agents currently have just 2.71% market share of overall listings, it has been claimed.
The market share has fallen off in the last two months – from 2.94% two months ago and from 2.87% one month ago.
However, it has climbed considerably higher than the 0.54% measured 12 months ago by comparison website Get Agent.
Get Agent looked at Purplebricks, Hatched, eMoov, HouseSimple, Tepilo, HomeSeller, easyProperty, Settled and other online agents over the last 30 days.
In total, they currently have 18,746 listings between them, out of 691,242 listings in total.
The online market leader, by some margin, is Purplebricks, with 6,950 listings. eMoov follows with 2,414, and then come HouseSimple with 1,928 and Tepilo with 1,178.
Hatched, whose purchase by Connells was announced yesterday, has 903 listings.
easyProperty, which launched into the sales market in September, has 208 listings.
What stands out is Purplebricks’s advance over the last 12 months, when it had 286 listings.
Get Agent puts Purplebricks’ total market share at 1.01%. All the others have market share of 0.35% (eMoov) or less. Market share for Hatched is put at 0.13%.
Get Agent also measured new listings, and says that online agents have taken on 2,956 instructions between them in the last 30 days.
Again, Purplebricks is a clear winner, with 1,409 of these.
HouseSimple comes next with 375, followed by eMov with 256 and Tepilo with 165. Hatched has put on 72 new listings.
Comments (9)
It’s fair to point out that online market share was reasonably static and that the recorded growth was in no small part the result of some big new players with huge budgets & strong brands entering the market. Sooner or later, the crowdfunding investors will look for results. Turnover is vanity, profit is sanity. Can the investment in advertising be sustained? Will market share start to grow again? Only time will tell. Stock market investors are far less speculative.
One thing is for sure, the key to online is the cost which of course means they need to sell a lot more property. Buyers of course don’t really care. I would also suggest most really good agents have buyers lined up even before a valuation – I know as a neg / manager I used to ring out a valuation and tell the vendor I had people waiting who were happy to view within 24 hours. The property still went on portals as I wanted new applicants and success advertising.
My single office has made profit to varying degrees in 9 out of the last 11 years, it must be worth millions. Any offers?
Guess you ought to be speaking to Countrywide!
The online listings are pitifully low when you consider they are national agencies that have spent millions and millions in advertising.
Not one online agent owner has ever bragged about how profitable their business is or concentrated / extensively commented on how great their service is as an estate agent.
All we ever hear from them is how much they have raised crowd funding or how much they could be worth to the stock market………….It speaks volumes about what they actually think about their customers and their service.
There is no reason for their not to be one large on-liner taking their share of the market (maybe even 2) and PB have already staked their claim to that title. The numbers (at the moment) just don’t add up, so unless they are able to massively increase listings or push the prices up, they are going to struggle to justify the crazy numbers being banded about re their valuation.
They will however still be able to make a tidy sum though.
Thing is, the future isn’t what is important for the incumbents, its a flotation, that’s where their money is.
The greatest con that the OL’s have managed to pull off is that EA’s are not on-line and more business is done outside of normal hours, ergo, if you are a traditional, you can’t offer the 24hr service, which is nonsense.
We had websites first! We had apps first! We had blackberries first, we now have ipads and iphones and the really hot agents take calls and answer emails, 24/7, 365.
Yes PB might have national coverage and lots of properties on their books, but unless you are undergoing a major relocation, it doesn’t help the local family, person etc looking for a home within a 5 mile radius of your office. So how are they going to challenge you, unless they can really take market share in every town, which is what they need to do.
It’s a tidy business and could make money if it can get through the cash burn and stand on its own two feet, but £250m, well that’s wishful thinking, but don’t be surprised if its lapped up, because it wouldn’t be the first company to be overvalued and overhyped that floats, only to lose its investors a lot of money.
Outspoken asks “What do you think?”
For me the answer is “I really don’t know”.
If I asked someone to value my traditional business they’d look at a variety of factors, but right at the top of the pile would be net profit. If I was making loads of profit the valuation would go up, if I was making very little profit it would go down.
If I said “Look, I know I’m running at a hefty loss at the moment, but hey, I’m gaining market share at a rapid rate” I’m sure any prospective buyer would smile politely and suggest that until I made a profit my business was pretty much worthless, or possibly even a liability.
All of this seems pretty logical to me, yet add the words “on line” to a business and that logic goes straight out of the window.
I really don’t understand how any business (not just an on line agency) which is essentially a start up making a loss can be immediately worth tens or hundreds of millions of pounds.
Perhaps I’m just getting too old for this game?
Remember the dot com days, that’s exactly what happened to start ups and tech Co’s. Everyone went mad for them and valued them at grossly overinflated values and people still ploughed into them only for the majority to go bust.
That’s the issue, if enough analysts can convince enough people the future is on-line, then the public and institutional investors will buy it up, all in the hope of profit, hell, for some of them it doesn’t even matter if it fails, it’s just a punt.
So yes, normal valuation would be set against profit (EBITDA), but in the absence of any profit, its all hope value and how well the boys sorting out the prospectus do!
If purple bricks had 7,000 listings at £600 a time, which is split 50:50 with their local lister, this gives them a potential income of £2.1m if they sold all of their listings. We hear that the amount they spend on TV advertising is well in excess of this sum, so they are making significant losses. Also it is rumoured that the moment their TV adverts stop, their valuation enquiries fall off a cliff edge. How long will the business be supported by crowding or investment from shareholders and how do those investors expect to ever get their money back or obtain a return on their investment. We know an agent will never sell 100% of their listings so this business model doesn’t work. Or does it? What do you think?
….”potential income of £2.1m if they sold all of their listings”
Correction!
1. They DON’T have to sell the property to bank the money.
2. They get paid regardless of results.
3. Local experts get paid “per-listing” not “per-sale”
So….
What price would you like to put your property on the market at Mr & Mrs Vendor?
£7,000,000 for a 3 bed terrace in Bolton you say?
Sounds about right to me!
What!? The other agents valued it at £99,000.
Well, they’re just undervaluing it to bank a quick commission cheque.
We can do much better than that for such a lovely home.
Yes, of course we get the same results. Honest. Our properties sell for 99% of asking price – see, it says so here on our website.
Oh, did I mention how much cheaper we are compared to traditional agents?
I know, those nastly high street agents are such a rip-off.
Sign here please.
Nope, there’s nothing to pay…UPFRONT 😉
….with a pitch like that it must like taking candy from a baby.
It has never been about providing the customer with a great value / innovative serivice.
It has always been about getting market share as quickly as possible and then IPO.
Poor poor naive people – no wonder the public hate us.