All the signs point to tough times ahead for high street estate agents, as online firms undercut them on cost and deliver “the flexibility customers want”.
The claims were made in yesterday’s Sunday Telegraph which said that online agents’ share of listings on Rightmove are now 7.1%, up from 2.4% in 2015.
The article also says that the average traditional agency fee is £4,300 and the average online agency cost is £633.
The article – which attributes to EYE a list of largest estate agency groups by property listings as at last December – says that while the online market is still relatively small, it is growing “at a rapid pace”.
The article, by Rhiannon Curry, goes on: “Some might say that it is not before time. Traditionally, high street estate agents have a bad reputation for poor service delivered by men in shiny suits who charge an exorbitant fee.
“They have suffered as rents and business rates increase their overheads, amid wider turmoil on the British high street that has seen shoppers move their business online.”
The full-page article quotes one seller who used Purplebricks and said it saved her over £12,000.
It also quotes a buyer who purchased through a local agent, Oliver Burn, in Stockwell, London, and was happy with its service. But the same buyer said she only looked for properties on Rightmove, and that it was “too much of a faff” to look in estate agents’ windows.
Russell Quirk, boss of the newly enlarged Emoov business, says in the piece that it had merged with Tepilo and Urban because the market needed to consolidate: “A lot of investors were only interested in backing one or two companies, and from a consumer point of view only the biggest firms command that credibility and trust.”
He also says that while online firms save consumers money, it is important that they “provide the same service and outcome – if not better – than a high street estate agent”.
Lee Wainwright, CEO of Purplebricks in the UK, said that there is significant scope for online firms taking market share: “I don’t think it will ever be 100% online and I do think there’s room for high street agents, but we think it will be 30% to 40% in the near term.”
Comments (34)
Proper Full Service Estate Agents see tough times ahead for FOR SALE BY OWNER sites like Purple Bricks, Emoov, Tepillo as investors funds start to dry up.
Its all well and good talking about the public looking at the internet after they have finished work, but as confirmed by Purplebricks Twitter last week, they dont deal with email enquiries until the following day and their lettings department can only be contacted during working hours.
The only thing 24/7 is their “live” chat, which many high street agents have now anyway.
>The only thing 24/7 is their “live” chat
Not sure about the other online Agents but with PurpleBricks, booking viewings, making offers and messaging between buyer/prospective buyer and seller is not limited by PB as it’s via the online platform. So all available 24/7.
Booking valuations is also handled by the online platform which is available 24/7.
Can only tell you what the Purplebricks twitter lady stated.
Regarding booking appointments, you may be able to ask for a time that suits you 24/7, but what i also read is that once booked appointments are changed or cancelled by the LPE, so again not much different from a high street agent. Potential buyer emails at 10pm to view, we ring them 9am next morning and hey presto its sorted for a time that suits them and us.
LPEs won’t cancel viewings if they are not showing the property. PB say 40% of customers take the optional extra of PB viewings so 60% dealt with by the seller.
In the 40% of cases where an LPE is showing the property then in my experience you will get a response well outside typical Estate Agent hours. Perhaps 10pm might be pushing it but I’d be surprised if most LPEs didn’t respond before 8pm.
>Potential buyer emails at 10pm to view
According to a mystery shopper survey of 30,000 branches 40% of traditional Agents didn’t answer email enquiries. See http://www.propertyindustryeye.com/unanswered-phone-calls-and-ignored-emails-found-during-giant-mystery-shopping-exercise-of-30000-branches/
So in terms of availability the online solution is a lot better.
“According to a mystery shopper survey of 30,000 branches 40% of traditional Agents didn’t answer email enquiries.”
B0LL0CKS – complete, utter b0ll0cks, ducky.
NOWHERE in the article you refer to (from OVER NINE MONTHS AGO) does it state that the email enquiries were sent only to “traditional Agents”.
You have no way of knowing that your #fanboy_fave online offerings – purple, orange… or any colour of the rainbow for that matter – were included or not.
You are not allowed to contact people after 9.00pm on the dog and bone.
Quote from Purplebricks Twitter feed the other day.
“Good evening Michelle you will need to call 0121 2964853 in office hours and you will be put through……”
On line only agents can and do work. As a traditional agent I would be a fool to ignore them. Having said that.
ex on line vendors are an upward swing. They have all tried PB or others and those that haven’t sold feel as if they have been poorly served and returned to the traditional agent.
At the moment the online agents (if that’s even the correct term for them?) are able to control their client reviews (trustpilot) but like a dam that’s starting to crack it wont hold forever.
So PB et all, enjoy your place in the sun while it lasts. Traditional agents have been at it for over 300 years, we’ve honed and improved our skillset reduced our fees and offer no sale no fee commissions. At some point you are going to realise you cant continue with a low upfront charge forever because too many ex vendors will eventually have their voices heard.
The so called “On-liners” are trying to push their “flexibility of working” to customers needs… we have to assume they mean timing. When they start offering “no sale no fee” packages at better rates, they will gain ground on the “High St” agent. If the “High St” agent decides “why do we need a shop window?” and starts operating from home bases offering a service where someone is on call during most consumers waking hours, with their knowledge of local area and qualified experience, they will be able to compete and knock the “on liners” out of the court….. virtual offices are the way forward… we could even end up with something akin to working like realtors. Views please….
I am a one branch outfit so dont pay business rates, calls divert to my mobile out of office and i can pick up emails remotely out of hours. The rent of the office is about £1k a month i consistently get one or two instructions a month of people who called into the office. I regularly get people calling into register to buy property some of which convert into instructions. They may or may not have got in touch if i didn’t have a high street office but not everyone would have. Vendors like the fact they can call into the office and speak to us whenever they want. Completions are a doddle compared to the online guys having to run around at a conveyancers whim.
Without sounding too complacent I am quite happy that my high street presence provides a great return on investment.
Every time someone passes you office, night or day, it subliminally reinforces your presence, digital and physical, and vice versa.
It isn’t possible to replicate that sort off #local presence, let alone for £1k/month
When anyone sees a PB board what will it reinforce? Terry the t055er on the telly, the narcissistic malcontent who has one of his sessions mid wedding.
BIGEEB46
We have worked like realtors with a direct personal service for four years, and combined it with an office presence, that people want. The system we use is far more efficient, than the traditional model we used to run, but it does require certain systems in place that we have worked hard on to perfect over time. We get most of our business by referrals and haven’t done newspaper or leaflet drop marketing for three years.
Happy to share ideas if you want to make contact.
Meanwhile PB are under investigation in Australia AGAIN for misleading consumers with the same remarks they make here in the UK. How big will the fine be this time?
Well that’s somewhat misleading. It’s an investigation in Western Australia, a completely different state to the prior investigation and fine which you’d imagine wouldn’t be taken into account.
Oh, that’s ok then
‘Meanwhile PB are under investigation in Australia AGAIN’. Last time I looked Australia and Western Australia were definitely part of the same land mass and country known as Australia. Are you deliberately obtuse?
Woodentop’s statement was misleading by virtue of the omission of the material fact that each State has its own trading standards equivalent. So stating “AGAIN” in large capitals is misleading.
So, no doubt there will be a different outcome! And yes, I am being sarcastic.
AGAIN refers to “in Australia”. Last I looked, that is not anywhere near as misleading as PB advertising. You really to do take the biscuits at splitting hairs. Now which biscuit company and what animal hair was I talking about. I’m sure readers can come with some suggestions, for you.
Oh by the way ducky, Western Australia 31.4 times size of the UK. So pro rata that 31.4 x more area of misleading statements than here.
Head. In. Sand.
Is it not worth pointing out that two of the founders of Yopa are the grandsons of the founder of the Telegraph group, who often run editorial championing the online brigade.
Mind you, given their recent humongous media spend doesn’t seem to have done a thing in terms of their listing levels, I suspect they need all the help they can get…
To answer your question… “No – it isn’t worth pointing that out”.
It’s irrelevant.
And why not? Do you not think their relationship will gain them column inches?
If not, you’re daft…
Get your stories straight you lot
In 2015 Russell Quirk said online listers had an 8% market share, see for yourself
http://www.propertyindustryeye.com/russell-quirk-interview-why-my-firm-is-going-to-be-worth-millions/
7.1% down from 8% is a contraction, either that or Quirky was making it up.
Excellent point Robert.
I am far less agitated by the activities of so-called ‘on-liners’ than some other estate agents appear to be. In many ways I believe they have done our industry a favour.
That said, it is very important to be as precise as possible with statistical claims such as this. Those making such claims should be accountable for what they say. I would be very interested to hear an explanation from Russell if at all possible. I’m genuinely interested to hear how these two ( apparently contradictory ) claims can be legitimately expressed.
What was ( in 2015 ) and is now ( June 2018 ) the actual market share of so-called ‘on-line’ estate agents?
From the quoted article:
‘He includes the likes of Hunters’ personal agents, EweMove, Next Chapter and others: “I’m making the point that the share of traditional bricks and mortar agents is being diminished in favour of all agents that operate ‘untraditionally’.”‘
I’m not sure if that accounts for the apparent discrepancy.
Best to do your own research. It’s very easy to get an approximate figure. People with their own agenda will try and mislead.
In a recent interview ‘down the other pub’ (TM: PeeBee) Mr Quirk was quoted as follows:
However, he (Russell Quirk), admits that with most of the sector accepting that online/hybrid still accounts for only 7.1 per cent share of the overall market, previous forecasts of growth made by himself and other players have been over-optimistic.
“Progress is definitely slower but that doesn’t mean it’s not happening. We’ve learned not to give timescales and exact figures but there comes a point – that’s probably when online/hybrid takes 12 to 15 per cent share of the market – when everything accelerates and it becomes mainstream.”
Does anyone have tweezers? I found a teeensy weeensy bit of straw and I’d like to clutch at it
Here’s a thought. If the online agents are gaining momentum, could we consider that they are in part a cause for the current challenges agents are having with market conditions ie nothing to do with fees but the fact that these muppets are out overvaluing, misleading vendors and only incentivised on listing instructions as lets face it selling the houses is what proper agents actually do. Any idiot can over value so hence a lot of the talentless people that are actually controlling a chunk of stock that is sat there gathering dust and going nowhere and with vendors outlook being misinformed and slightly jaded.
The market needs a massive shot of adrenaline and that comes down to motivated sellers on the market for the right price. Looking at Rightmove you’ve only got to see the amount of listings that have been on for far too long, many look like great houses, albeit highly inflated prices compared to what they paid for them only a short time ago in many instances.
How about the onliners, prove they are gaining momemtum but actually shifting some of the stock they are lingering onto and actually getting the market moving a bit faster.
There was a lady on some money saving forum last couple of days, asking why her house wasnt selling. Been on for 13 weeks, had viewings that apparently all wanted her house but they hadnt sold their own. She was asking for advice and a reason why she hadnt sold. Upon looking at her home a few commented that compared to similar houses within 1/4 mile she was the most expensive and wasnt in that great condition. So basically, she was overpriced, had been fed a load of balony with feedback and wasnt moving any time soon
Her agent…..Tepilo
30-40%…..he didnt even know the difference between a sale agreed and a completed sale when pressed on the radio! Sure the call centre bods are gaining ground in some areas and losing ground in others. In my area, i havent seen any new Emoov or Tepilo boards all year, just the same one down the road that has been there since 2016.
Love them or hate them (I’m the later), purplebricks have productised the industry well, and do offer consumers a choice from the traditional service. They just to be more transparent that they charge regardless of performance.
It’s a fake industry operating under the guise of online disruption. Traditional business people simply didn’t used to lie.
It’s a fake industry being paid for by hedge Funds taking the **** out of dopey trading standards.