Q. How would you describe easyProperty? How will easyProperty be different from, say, Purplebricks, and the likes of Hatched and eMoov? What is the future for online agents?
A. At this stage, we have no competitors. There are others in the same space but we are very much about transacting a new way of doing business. We are online agents, able to do every part of the transaction that a traditional agent can. But we are also very much about choice, and empowering landlords. We break our services down into components, and it is up to the landlord to decide how much or how little they want to buy. If all they want to do is list a property with us, it will cost them nothing. We charge no commission.
Q. Are you ready for launch?
A. We are ready. It will be in the week beginning September 15 and we are just finalising the exact date, likely to be the 17th. I must stress that we are an evolving business, and we will still continue to evolve after launch, adding more and more services – all of which will be wanted in the lifetime of a tenancy, whether it is an energy supplier or Sky TV. Ours is not a finished article. We will never be finished.
Q. You had been going to launch in May?
A. Yes. However, in a funding round, we had hoped to raise £2.75m. We raised this within three days. Within eight days we had raised £5.6m. In fact, we used only £5m of it, but this extra money allowed us to invest more into our systems and back office – and this obviously took more time. We will shortly be looking at another funding round to enable us to roll out our services more rapidly.
Q. ‘Disruptive’ seems to be the word of the moment. Why does estate agency need disrupting? Why do you want to “mortally damage” the traditional high street model? After all, both you and Harry Hill have been traditional estate agents.
A. I cannot speak for Harry. However, I have been in the estate agency business since the age of 16 and run my own business, Clarke Hillyer, for the last 12 years. When I first refurbished those offices in 2003, I had two seats for visitors at every desk, plus other seating areas – and on a Saturday afternoon, we’d still have people standing in the aisles. When I came to do the next refurbishment, I realised the world had moved on. There is simply no need for a high street office. The only time people need to go into it is to pick up keys.
I don’t believe any estate agent already in business and starting today would believe they must have a high street office. When I started writing my business plan, I felt I was in an interesting place because I was rewriting the rule book.
Q. Is your 0% commission sustainable?
A. Yes. We will be making our money by breaking down an agent’s service into components and using these as income streams. The majority of our income will come from landlords, rather than tenants. We are charging tenants no admin fees, but if the landlord wants, we will be charging tenants for references at under £50. As far as landlords are concerned, all our fees will be stated upfront. We have met with Shelter, and they seem very pleased with what we are doing.
Q. Other than licensing his brand to you, how involved is Sir Stelios in easyProperty?
A. Stelios is very aware of his brands and is a fabulous brand partner. He gets very involved.
Q. Do you think “easy” is the right brand, and if so why?
A. 100% I do. We wanted a brand with national recognition, one that was synonymous with being a no-frills value brand, where you can buy the components you need. We may not necessarily always be the cheapest –Ryanair may be cheaper than easyJet – but we are trustworthy, open, honest and up-front.
Q. In your presentation to investors in January, there were criticisms of Countrywide, including that it had 46 separate brands.
A. It was an observation. Countrywide has grown by acquisition and kept the original brands. Today’s consumer prefers to look for a single, recognisable, trustworthy brand.
Q. What is Harry Hill’s role in easyProperty?
A. He is one of four non-executive directors. He has over 30 years’ experience in the sector, and ran Countrywide very successfully for a long time. He has a lot of business attributes.
Q. How quickly do you see easyProperty expanding and then rolling out across Europe?
A. First of all, we are starting in lettings. At the end of Q2 or the start of Q3 next year, we will go into sales – still with the 0% commission model. After that, we will go into new homes, online auctions and commercial properties. Within three years, we will attack Europe. We have the easyProperty licence in six countries – France, Germany, Italy, Holland, Spain and Greece. All are familiar with the “easy” brand.
Q. Will you be able to list on Rightmove and Zoopla? Can you comment on not being able to list on OnTheMarket?
A. Yes, we will be listing on both Rightmove and Zoopla. Both have been stringent but accommodating. We are, after all, agents. As far as OnTheMarket is concerned, I find it incredible that they are banning online agents. It is nuts, when the market is in this transition. It is very shortsighted.
But I suspect they won’t be around long enough for me to worry about it. Consumers want to go to one portal and see the full market on it: if they don’t, they won’t go back.
Q. Anything else you would like to raise?
A. Yes, we are not in this for the short term. I think the days of a standard traditional agent, who has little web presence and who expects customers to walk in through the door, are numbered.
Unless they adapt, they will simply not be around in a few years.
I believe there were will be a shift to an online market share of between 25% and 50% within four years. I think you would have to be pretty brave to think that won’t happen.
I also think there will be two or three more big national operations like us – and obviously, with up to half of the market between us, that adds up to a very healthy business.
Comments (28)
Despite my facetious comment earlier I have to say I do think there is a market place for companies like Roberts and Purplebricks. I am trying to buy an investment property at the moment and I am delighted to say the service Ive received from the latter is spot on. They've kept well out of the transaction, they priced it surprisingly competitively for the road it's in and it seems I have had very little competition from other interested parties so I managed to get the property for a great price. A* in my book. I will certainly be buying from an internet only agent again. They were right, I saved thousands!
It's a far more measured and erudite interview than we have seen from some others. I still fail to understand why all this rhetoric aimed at the industry is necessary. Surely it's better aimed at potential customers. All these cyber people do is fuel a dichotomy and prod an audience who have heard it all many times. I am sure that sooner or later someone will get it right. We will know this my their success and market share – not their prophecies and foretelling of doom for the misnomer labelled as a 'traditional High Street agent'. They are like an on-line Nostradamus.
How many of us still do business the same we did 10 years ago? We continue to evolve and have to do so as different models emerge. That's what good agents do – they adapt. Search for agents in a particular town and invariably you will see small local agents on page ONE – how many online agents are listed?
Respectfully – what is different other than the charging method? If it were all about low fees, then Stellios would have folded to Ryan Air – but he didn't which in my mind undermines the principle of this Easy incarnation. Foxtons profits are up and cheap agents dominate no high street I know of. As for people looking for a single, trustworthy brand – yes, it works for some goods, but seldom services. We all know of towns and villages where a local agent is dominant and the corporate single brand struggles. Why? Word of mouth, track record and service. Until you have that, it's hard to have the right to judge others.
It will be very interesting.
Couldn't agree more.
How many firms have we seen open (and close) in our high street with amazing low fee offers. If it were as simple as that they would all have stolen the market. Service is key, be that for an on line firm or high street agent.
With the constant comparisons of airlines in the exchanges today, lets not forget Ryanair currently who are going through a comparatively tough time as a result of a lack of service and regard to their customers. If an online firm thinks its a s easy as money up front and all then goes quite, they will be in for a rude awakening.
I would certainly choose easyjet over ryanair any day of the week but would prefer BA over easyjet too. When Mr Ellice says "I think the days of a standard traditional agent, who has little web presence and who expects customers to walk in through the door, are numbered", exactly what planet is he on? Like 99% of the agents in my area, easyjet is ALSO going to be advertising on RM and/or ZPLA – but, as an online agent, easyjet will be barred from advertising on OTM post January 2015. So, no, Mr Ellice, punters will not be able to go to "one portal and see the full market on it". Dream on easyAgent 😉
It will fail…. trust me. There is a growing over expansion of on-line portals who think the internet is the end of everyone's worries and cheap to operate and make easy big bucks. On-line portals will only ever be able to have a share in the market and this one is no different to any others already around so all they will be doing is squabbling between themselves over their share of the market. What they still can't get into their heads is that, particularly with rental sector is the regulations that are coming and those now in place. They will never be able to satisfy due diligence, ML, OFT Practice orders, Consumer Protection & Unfair Trading Regs 2008 as they are reliant on Joe Public to be genuine on all matters. They cannot physically comply and leave themselves wide open criminal activity.
"It will fail…. trust me. There is a growing over expansion of on-line portals who think the internet is the end of everyone's worries and cheap to operate and make easy big bucks. On-line portals will only ever be able to have a share in the market and this one is no different to any others already around so all they will be doing is squabbling between themselves over their share of the market."
This.
A business model that is clearly the direct result of an equal presence on the big portals. Advertising monopoly costs are one reason to support OnTheMarket, but a FAR bigger reason to support a unique agent owned portal is to push back and say – sorry, already full up, you'll have to take the next flight!
Mr Foreman – "… a FAR bigger reason to support a unique agent owned portal is to push back and say – sorry, already full up, you'll have to take the next flight!" That sentiment means nothing whatsoever to the public, however. They simply want to see property – and as many as possible in one place. Why else have Agents been populating them for so long?
Dear PeeBee, I agree entirely, that's why the majority of local agents (the ones with real shop fronts and the like) will be telling their customers that it's called OnTheMarket. On the subject of customers, my own view is that it is an extremely bad idea to take money from customers and simultaneously encourage new customers who's agenda is to put your existing customers our of business. That is why OnTheMarket has serious traction and that is also why online agents are not best pleased that they are excluded.
Mr Foreman – you've so far 'missed out' on the many, many lengthy AM-centric discussions that have taken place here on EYE (assuming that you haven't previously posted under a different name) since March. Sorry – but you can't state "…the majority of local agents… will be telling their customers that it's called On the Market" – because that so far simply isn't the case. A PROPORTION of Agents, yes – but so far the numbers pan out at around 4000 – that's a long way off being "a majority". Now I like this next one – a lot – "On the subject of customers, my own view is that it is an extremely bad idea to take money from customers and simultaneously encourage new customers who's agenda is to put your existing customers our of business." Hmmm – so what about this scenario – you accept instructions to sell a property on Acacia Avenue. A week later, another vendor approaches you with an identical property on the same street, wanting you to sell their property also – but at a cheaper price. Aren't you then putting your current customer at a disadvantage – potentially delaying their property from selling? Or… are you simply facilitating a market to function?
It must be a Wednesday – another cheap, web based portal. Yawn, yawn. Hopefully, the only people they will really be competing against will be the other hopeless web based little portals. On a board count is this area we found 0.1 % web based agents with For Sale boards. It must be time for me to completely change my (very successful) business plan and think again – or not! We have happily picking up instructions from these web based businesses from time to time and find only one feeling from the sellers – great disappointment and anger at the money and time they wasted.
'Mortally damage' is a horrible phrase in my opinion. What sort of person would use that? I recently set up a 'traditional' agency. I simply try to offer my customers decent customer service face to face and they actually seem to like it believe it or not. I still know people (who pay good money!) to fly British Airways even though Easyjet are around.
Is the answer: An arrogant, egotistical t*at?
The term "Buy cheap, buy twice" springs to mind..
Bless you Mr Ellice but some of the glaring problems with your model that you are omitting…
Great interview and a spot on comment regarding On The Move. I would be surprised if the online ban they have created lasts out 1 year after they launch.
A much more considered view in my opinion than the aggressive stance put forward initially by Harry Hill. Perhaps that's why he has taken more of a back seat?
Mr Ellice seems to have at least put some thought into what he believes the proposition to be. I agree with him completely in regards to an agents need to change and evolve but I do struggle with the constant attack on the "high street agent". I do not understand, if the on line proposition is so strong and obvious, why all of the operators, bar none, spend so much time trying to convince "traditional EA's" of the error of their ways. Its a bit like me opening another office and advising the OA's in the town of my proposition and marketing strategy. Surely if its such an obvious business winner, the public will vote with their feet?
For my part I believe that service and the ability to deliver it, will remain key. I cant say I agree with Mr Ellice's predictions of a 25-50% shift in consumer traffic to portals, but I do believe it will start to play a bigger and significant part. Giving the consumer choice will be integral to the new EA model but, respectfully, there is nothing that easy/purple or any of the others offer that a decent high street agent cant.
"nothing they can offer that a decent high street agent cant"…. that's correct except they can do it infinitely cheaper. Now cheapest is not always best but the majority of consumers won't think so – this is human nature, take easyJet as an example…. Yes we know flying with them is budget and generally a bad experience but we do it anyway to save money knowing that it is something we do very little…. I can see the appeal of this model to the consumer in a similar way. Best of luck to them I say. If High Street agents are scared of a little competition then perhaps they should rethink their business model and be more competitive. On the flip side if the all knowing High Street agents are laughing thinking this is never going to work then what do they have to worry or ***** and moan about?
There's a difference between taking a low budget airline and allowing someone to look after one of your most expensive assets..
"Ryanair may be cheaper than easyJet – but we are trustworthy, open, honest and up-front." – Does that mean Ryan Air aren't?
Very true dave_d : but if High street agents cannot get their value as a service across to consumers and have it speak louder than a cheaper model then it's a moot point. With most things in life you generally get what you pay for… Case in point, most agencies only want to pay £200 for a website then moan when they get no leads or traffic then put the blame on large portals taking the traffic away from them… This is seldom the case. My point is that if Agents act this way then expect consumers to act in the complete opposite way just because it happens to suit their business model then that's highly hypocritical. Agents (High Street) have a bad reputation and consumers MUST be thinking to themselves "why are we paying these high fees when they don't deserve it"… This is not an attack on High Street agents, this is me pointing out a flaw in the marketing of agents…. The price of services is still over-shadowing an Agents "service worth / benefits" when it comes to marketing… Agents can either adapt or change tactics or lower their prices. Online / budget is not going away. It's a viable business model that caters for quite a large chunk of the property industry. It might not work in London or Posh areas but the country is not made up of ALL posh areas. Agents need to get a grip on reality that just because people chose them in the past does not mean they will choose to use them in the future. This could be due to little to NO choice in the past or maybe not Only time will tell.
In the words of Red Adair, "If you think it's expensive to hire a professional to do the job, wait until you hire an amateur."
Why can they do it "infinitely cheaper"?
What continues to surprise me in all this online/traditional debate is that if its accepted that the traditional agent is dead if they do not evolve, what's to stop those agents fighting their own corner? What's to stop them offering an "internet only" service for a fixed fee? What's to stop them fighting fire with fire?
phoenix:
They themselves are their own worst enemy. This industry is still dominated by dinosaurs who really don't have a clue about digital marketing. They're stuck firmly with the belief that they and only they are entitled to sell / let houses and anyone else treading on their toes are vermin. They (Traditional Agents for lack of a better phrase) for the most part don't help themselves in any way whatsoever, they continue to feed these giant portals with stock which lets face it is a very large cost that could be quite easily curbed and passed on to the consumer but the argument is "Where will we get leads from if we don't use RM & Z", well I'm sick to death of explaining that one because it falls on deaf and stupid ears! The answer is simple in reality. Stop feeding large portals, consumers will find property no matter what, they will use search engines, social media, and even go down the high street if they have to so to ensure they're getting the property they want…. How this does not make sense to "Traditional Agents" is part in parcel of why they need to evolve… because they don't understand digital marketing and tend to believe the sheepish dribble that they have been fed by Rightmove and Zoopla's sales team that makes them think that they need the portals to survive… The fact is actually the opposite and without the stock of agents RM & Z would cease to exist with ZERO traffic inside 3 months.
They only flaw in your argument is listing stock – sellers are aware of the big portals and do demand that their agents be on them. Yes, maybe that comes down to the persuasion abilities of the agent…
In 2010 Harry Hill broke down the cost of selling a property, an agent selling 45 properties a year, he claimed, would not make any money. The figure put forward by Harry Hill included £12k for office costs, are you able to explain how a 10% saving on fixed costs allows an online Agency to do it {not specified} infinitely cheaper , especially given the amount of cash you intimate an agent ought to be spending on decent SEO and SAAS? Actually it's a rhetorical question; I know you can't. You just blah, blah, blah about how great you are, how much you know and how stupid we are.
Phoenix, what do you think high street agents need to do to evolve?
What most of them are doing already.
Embracing the fact that service is key and ensuring that their proposition is the most all encompassing in the high street. Ensuring that they and their staff accept that internet firms are here to stay but that the proposition is different. In short, "knowing their enemy" and embracing the fact that change is afoot.
If an agent cant defend their proposition, including their fee, against an internet only firm, there is no place for them. I say this having spent countless hours in appointments over my career, as have most reading this exchange, doing exactly that but against my high street competitors.