UK estate agents are on the frontline of global disruption in the sector, according to an extensive new report.
US-based proptech expert Mike DelPrete has published a 200-slide analysis of emerging models in the sector and said that while “nothing is guaranteed” he expects Purplebricks to emerge as a winner against other online agents. His conclusion is, however, unlikely to cause any surprise.
In his report, he highlighted the phenomenal growth of Purplebricks’ share price (+350% since late 2015), as compared to incumbent Countrywide, which saw a drop of 71% over the same period.
He told EYE: “In my opinion, the UK market is at the forefront of industry disruption, especially in the traditional estate agency space.
“The rise of online agencies like Purplebricks and the impact on traditional players is unlike anything I’ve seen in any other markets.”
He said: “The odds are in its favour.
“It has a strong leadership position, growing brand recognition, and the most traction at scale, giving it better economies of scale.”
In his report, he pointed to analysis of listings on Zoopla that showed Purplebricks had more than 16,000 last month, as opposed to Yopa with around 3,000, and its other online rivals including Emoov, Housesimple, Tepilo, easyProperty, Doorsteps and Settled with fewer than 2,000.
He added: “This dynamic is unsurprising due to the lack of product differentiation and network effects [a phenomenon whereby a product or service gains additional value as more people use it].”
He also pointed to the amount of money Purplebricks has raised as compared to its rivals and commented that while it doesn’t guarantee success, it does help.
EYE reported last month that ten of the top online/hybrid agents have raised nearly £250m between them since launch, with Purplebricks accounting for £97m of that figure, and Yopa a further £58.6m.
Singling out Purplebricks for further analysis, he said the business was “scaling well”, relying on figures from its annual report that show its revenues have more than doubled between 2016 and 2017 with only a small increase in marketing spend.
Purplebricks’ full-year revenue shot up 132% from £18.6m in 2016 to £43.2m last year.
Over the same period, its marketing costs rose from £12.9m to £14.4m, according to its annual reports.
Meanwhile, DelPrete has calculated that its marketing return on investment (based on revenue per £1 spent) will be at a multiple of 4x in the first half of this year, up from 2.8x in the first half of 2017.
He also referred to Yopa, Tepilo, HouseSimple and Emoov as “runner-up” UK online agencies.
When it came to the US market, he named Opendoor, which buys houses from consumers and then flips them, as one of the biggest disruptors.
Drawing conclusions from his research, DelPrete urged agents to explain their customer proposition clearly and concisely and to have one clear call to action (typically offering a valuation).
He said: “Less is more. Keep it simple. Don’t confuse users by offering too many options.”
He also predicted that in five years’ time the industry will look similar but with more consumer choice.
While online agents are expected to grow their share of the market, he added: “Agents aren’t going anywhere.”
“There is a strong correlation between keeping people involved in the process and traction.
“In other words, tech-only solutions have limited traction.”
You can view the full report here.
Comments (47)
And then it’s on to the next project, crowdfunded or IPO, purpleplumbers, pay upfront and find some solder and compression fittings on the doorstep when you thought you’d get an installed shower, the worst kind of cynical chancers
Surely you’ll get a bucket of water, a length of string, and a nail as a minimum?
I’m sorry, all our experts are busy right now but your call is important to us, please leave a message after the beep…
Theres a hole in my bucket and the water is slowly drying up.
One thing that has been overlooked in Mr DelPrat’s ****ysis has already been mentioned above by more that one person.
The ‘growth’ of PB can only be attributed to one thing – their countless £millions of TV advertising spend. £millions that will account this year alone for the entire income derived from quite a chunk of their annual listings – never mind the countless £millions that have been chucked at the marketing fan in previous years when the income was pronouncedly less.
But of course Mr DP won’t want to hone in too closely on that little factoid. In fact – he’ll want to bury it deep under the same steaming heap of ******** that PB and the other onliners/hybrids/NSPR Listing Facilitators bury the reality – that this is nothing whatsoever to do with “proptech” or “online” anything.
They are winning their business through spending more than they can afford to spend… and by utilising NON-proptech means and ways.
They have nothing more to offer to the job in hand other than ‘less than the rest of us’ – and swathes of billshuttery and f***wittery (credit: Jonnie).
Oh – and that 22% of their glowing 5* ‘reviews’ scweam out that good old Jasper or Persephone “weally, weally did work 27/8 to sell my pwoperdee”
DPs #fanboy admiration for all things Purple is kinda cutesy – but has more flaws than the Sears Tower (I know… I know – but it sounds right co I’m using it!).
This.
Without the TV any on-liner is a dead duck. It is nothing more than media propaganda and the longer is goes on, sooner or later the public become wiser. No sale = no fee is a gamble for investors and if you are not receiving a dividend and rely only on share value … what is the incentive to invest as the risk of loosing everything becomes much greater, as the test of time has proven for many ventures. In the picture of things, all on-liners have been a massive failure from the off. Pretty dismal returns for £250 spent and without that, most would have fallen by the wayside (note they don’t use their own money!) and just tick along from day to day. The only one who has managed to keep near to covering their overheads is PB, solely from media marketing, spin and upfront charges regardless of customer satisfaction. If they loose the investment they will be the biggest fall as there is no money to bail them out. I don’t believe they can afford to go no sale= no fee and customers would leave them in droves if it is ever found how successful they really are at selling properties, with all the other bad things they have created for themselves and mounting up. They do typify “Conmisery” and time is starting to run out and sooner or later regulators are going to step in to protect the public from their goings-on (surprised not by now). Have we seen these disruptors run their course? Getting very close now, once one falls it will be like a pack of cards as the independent media will have a field day and the “truth” will be the hangman’s noose.
There was a story on the BBC breakfast program this morning about the pop concert ticket resellers and how they deceive the public. One lady wanted to buy four tickets and was informed on the website it was £300. It then turned out it was £300 each and with additions it cost her £1,400 overall.
The ASA said the sites are deceiving people and must put the true full cost up at the start. They have insinuated they will be fining the companies that do not comply. It seems that eventually something does happen and things get put in place to stop the public being misled.
BUT WHY IS IT ALWAYS ALLOWED TO GO ON FOR SO LONG UNCHECKED?
It really fees as though new companies deliberately do this cynical marketing to gain market share and make extra money early on their life cycle. They seem to use it to give them a competitive advantage in the short term to get going!!!
Is it not now time new laws were brought in to protect the public from cynical and deceiving marketing, and give them retrospective protection, rather than having to rely on snail like and toothless organisations such as the ASA?
You asked this and I agree !!!
“BUT WHY IS IT ALWAYS ALLOWED TO GO ON FOR SO LONG UNCHECKED?”
And likewise from the same report we read.
36. Meanwhile, its investment bank, Jefferies, continued to boost the stock as it fell last year… Buy Hold Buy Buy Buy Hold Hold Purplebricks launches Purplebricks floats on stock exchange Buy Buy Buy Buy Countrywide’s Stock Price
37. …while at the same time maintaining a negative view of Purplebricks during its rise. Underperform Underperform Underperform Underperform Purplebricks’ Stock Price
38. Which highlights the risk of institutional bias when disruptive models threaten the status quo. 0 200 400 600 800 1000 Countrywide LSL ZPG Rightmove Foxtons Purplebricks DaysRecommended Jefferies Stock Recommendations August 2013 – March 2017 Buy Hold Sell Corporate Clients of Jefferies Direct Competitors of Corporate Clients
” SO WHY HAS THIS GONE ON FOR SO LONG UNANSWERED?”
I’m reeeealy tired of the words ‘disruption’ or ‘disruptor’…
I’m also very tired of idiots singing the praises of Purple Bricks or general ‘call centre’ operators phenomenal growth…come on! It’s built off the back of TV adverts that have had numerous ASA complaints, millions of pounds worth of INVESTOR money and a trench of DontTrustPilot reviews that are asked for after the client goes ‘live’ on the portals!! I’ve heard that there’s a well know online/telephone centre operation that actually have people calling the bad reviews to get them to up them by offering refunds…. really!!!!!?????? It’s mental!!!
We shouldn’t be praising them for phenomenal growth of the back of these things. Morally, we should be highlighting how they really got to this point!
MarkRowe
We shouldn’t be praising them for phenomenal growth of the back of these things. Morally, we should be highlighting how they really got to this point!
Great points….see my post below
And of course the traditional estate agency business is built on the back of complete transparency and honesty.
The Industry that required its own Act of Parliament and has its own department at Trading standards. The industry that has a shed load of case law behind it.
And of course the traditional estate agency business is built on the back of complete transparency and honesty.
I certanly have, as have many others and a mansion full.
Woodentop,
So would you advise somebody to phone up an Estate Agent with enquiries about the local area that a property is listed in? Would you not expect that agent to tell the enquirer what they wanted to hear?
No I would expect them to tell them the truth. If you tell people the truth to start with, you often avoid problems later down the line. The truth will out and all that.
Thanks ArthurHouse02.
Woodentop, what do you think? Would you tell somebody to just ask the Estate Agent about such things? Do you trust Estate Agents in general?
I have always thought it was illegal to lie to either vendors or viewers….so simple answer is to tell the truth. It always works out best in the end anyway.
I trust my dog. As for humans …. we have jails and we have heros. I know many good, bad and ugly in all walks of life.
I know I wasn’t asked – but I’m going to answer anyway. Unlike you, who when asked a question you run out of the room quacking the line you’ve had enough for the day.
“So would you advise somebody to phone up an Estate Agent with enquiries about the local area that a property is listed in?”
Always – unless they already had knowledge of the area (over 90% of buyers move within a 5-mile circle of their existing location), in which case what would be the point?
“Would you not expect that agent to tell the enquirer what they wanted to hear?”
No – unless “what they want to hear” is the truth – at which point, absolutely.
#duckshoot
PeeBee,
I presume the Newcastle lad/Estate Agent who posts on the building.co.uk forum is you and you are the one who advised somebody thinking of moving to Newcastle not to trust Estate Agents on the exact same issue you are now saying you should trust them on?
See http://forum.building.co.uk/forums/showthread.php?tid=4824&pid=22000
Chaz80: “Been offered a job up there and need advice on where to avoid, that kind of thing”
…..
PeeBee: “I am both a Newcastle lad; and an Estate Agent”
….
PeeBee: “Don’t ask a homeowner who is selling, OR an Estate Agent – they have a vested interest in telling you what you want to hear”
I sit here listening to you going on about how the online agents are dishonest. It’s complete hypocrisy.
This is comedy gold, PEEBEE exposed for the hypocritical fraud he is.
If this is your comedy gold, you have a low bar sunshine
Show me where, dom-doy…
Show me where.
Just one teensy-weensy ever-so slight problem with your post, ducky – that site no longer exists. Quoting its’ URL ain’t adding meat to your bone – today or ever.
The site hasn’t been running for some time, actually.
If I remember rightly you brought this up some time ago and you’re trying to regurgitate the past – but no doubt this time dearly hoping for a better result ‘cos I remember the last one didn’t end well for the quacker. So let’s have a little look-see, shall we?
Ahhh, yes – a quick rummage brings up our last discussion on this very subject – back in July of last year.
http://www.propertyindustryeye.com/its-christmas-come-early-4m-worth-of-purplebricks-share-options-given-to-two-employees/
Now – at that time your last words on the subject, when challenged, with your ickle duck’s @rse full of buckshot, were
“I will not elaborate further or keep checking back to see what is posted. Time to move on to the next topic.”
You bottled it. Waddled away and never returned – until now. And I’m just as ready for you as I was eight months ago.
SO – do you want more of the same or you just gonna quack off once again? It’s what we all expect of you.
But if you want to have your feathers stuffed in a cushion and your beak forcibly lodged – sideways – where no sun will ever get to it here and now –
Bring.
It.
On.
Crikey has he been boring us for as long as that?
I stand to be corrected on this – but I believe that the duck landed here on 1/3/17.
Sorry, ducky – I missed your special day.
Belated Happy Anniversary.
PeeBee,
I’m not trawling through that link and your ranting so please respond as though a new claim.
If you search for ‘peebee “Don’t ask a homeowner who is selling, OR an Estate Agent”‘ in Google keeping the double quotes then it shows that Google still has the page in its index and you can see your full comment in the snippet. I also have screenshots.
See https://docs.google.com/document/d/1nz1ZPMlp0Vnw6W4fTVaKLz8W2NiMMhI-wzAVObbSdPM/edit
So given that it’s clear you did say not to trust Estate Agents please do respond but keep it short and on topic rather than trying to deflect.
“If you search for ‘peebee “Don’t ask a homeowner who is selling, OR an Estate Agent”‘ in Google keeping the double quotes then it shows that Google still has the page in its index and you can see your full comment in the snippet.”
No – you can see part of the comment. Funnily enough, part of what is missing is the opening sentence of one post in a thread of if I remember rightly, half a dozen or so:
“Drive around. Talk to people walking their dogs/weeding their gardens – ask them what the area is like. They have no reason to tell you porkies.”
But of course that bit doesn’t ‘fit’ in your agenda – does it? That bit was the most salient point – and the most sound, honest and impartial piece of advice that possibly could have been given to the OP under the circumstances.
Unless of course you’d like to suggest otherwise – which is exactly what I asked last July when you waddled off into the sunset.
Oh – and as for the thread being “in its index” doesn’t mean people can be taken to the relevant page by clicking a Google hyperlink. But of course, a “Computer Scientist” such as you knows that like you know the back of your webbed foot.
Even someone of your particular skillset cannot raise that particular type of dead.
But, hey, that’s not a problem – you say you have the screenshots so you can post them all up here for the EYE audience to make their own minds up – can’t you!
“So given that it’s clear you did say not to trust Estate Agents please do respond…”
No – it’s not clear. Not clear at all. Quite the opposite – it’s as muddy a pond as you can make it with all your paddling around desperately looking for somewhere to hide or something to use as a weapon. Keep looking, ducky – those splinters of straws you’re grasping ain’t gonna help you at all.
In the meantime, at least try to get it right, ducky – you’re continuing to make yourself a sitting duck.
It’s as clear as day PeeBee. You are doing what I knew you would, trying to deflect with irrelevant nonsense. The advice you gave the guy was good advice, but doesn’t change the fact you told him not to trust Estate Agents and completely the opposite of what you said earlier.
https://docs.google.com/document/d/1nz1ZPMlp0Vnw6W4fTVaKLz8W2NiMMhI-wzAVObbSdPM/edit
On the subject of getting told what you want to hear:
Then: “Don’t ask a homeowner who is selling, OR an Estate Agent – they have a vested interest in telling you what you want to hear”
Today: ‘No – unless “what they want to hear” is the truth – at which point, absolutely’
Now you are saying they will tell you the truth whatever. The only time you’ll get the truth if we go by your advice on the building forum is if it’s in the interest of the Estate Agent.
Such hypocrisy. Shame on you.
PeeBee,
Retiring for the day now.
A simple request though, explain what you meant when you said “Don’t ask a homeowner who is selling, OR an Estate Agent – they have a vested interest in telling you what you want to hear”
Doesn’t that imply a lack of trust?
(A quick ‘Thank you’ to EYE’s chuffing wonderfully flawed posting system for ‘logging me out’ YET AGAIN – and losing my response to ducky that took me the best part of an hour to compose. Probably just as well.)
In short:
ducky
Please show all the other screenshots you have of that conversation where I was giving a young lad – who if I remember correctly from four years ago lived some 200 miles away from the area he was considering buying a property for him and his family to move to – some structured advice on how best to go about things.
A conversation from which you have decided one isolated sentence fits the bill (no pun intended) to make me appear to question the honesty and trustworthiness of my entire profession.
B0ll0cks doesn’t come in any larger portions than that which you’re trying to serve up, ducky.
But let’s play the game.
You state “So given that it’s clear you did say not to trust Estate Agents”. I can find no reference on the internet; no written rule, regulation, guideline or etching on a tablet of stone that “they have a vested interest” is the “given” that you seem to think it to be.
I cannot vouch for the honesty or integrity of every Estate Agent in the land, ducky. No-one can; nor should anyone say or even think they can. Nor would I vouch for every surgeon; fireman, soldier, solicitor or figure of any denomination, religion, sect or order.
There are good and bad in every walk of life. There are those you could wager your life on being able to trust and depend on – there are those that you wouldn’t leave in the same room with a penny if you ever wanted to see that var-nigh worthless copper-plated steel disc again.
No “one size fits all” here – or anywhere else for that matter. Unless of course you now better – in which case feel free to show me ANY walk of life; profession; calling or vocation where there is that guaranteed ‘rule’.
You’ve refused to revisit the last time you tried this one on – and failed miserably in the attempt. So – I’ll bring it here to you now. Back on 4/7/17 I asked you the following:
“1. Are you in some way suggesting that I have not given a prospective buyer sound, sensible, impartial advice?
2. Was I being unhelpful in some way, shape or form?
3. Was the advice – in any way you can categorically prove – disingenuous?”
I now, for the second time – and eight months in the waiting – look forward to your answer to the above.
Last post on the subject and as usual you have tried to change the subject to whether you gave the person on the building site good advice. No that is not the subject but in my opinion you did give him good advice and that you told him not to ask Estate Agents because they have a vested interest.
The problem is when i asked whether you should trust Estate Agents earlier on this thread you decided to answer the question by saying of course you should trust them, which is where you give bad advice and show yourself to be a fraud. What happened to the objective PeeBee of 2014? The one who could tell the truth about his own industry?
Like I say. End of conversation but here is what your bitterness and hypocritical agenda to discredit PurpleBricks has done to you:
>“So would you advise somebody to phone up an Estate Agent with enquiries about the local area >that a property is listed in?”
>Always – unless they already had knowledge of the area (over 90% of buyers move within a 5-mile >circle of their existing location), in which case what would be the point?
>“Would you not expect that agent to tell the enquirer what they wanted to hear?”
>No – unless “what they want to hear” is the truth – at which point, absolutely.
Note that unless somebody had knowledge of the area you would always advise to ask Estate Agents. Note “always”.
You state that you wouldn’t expect the Agent to tell you what you wanted to hear. You said the opposite back in 2014.
“You state that you wouldn’t expect the Agent to tell you what you wanted to hear. You said the opposite back in 2014.”
In 2014, as part of a long conversation that you want to ignore something like 94.8% of, I did state
“Don’t ask a homeowner who is selling, OR an Estate Agent – they have a vested interest in telling you what you want to hear”
They do. The homeowner wants a sale; the Agent is duty bound to the vendor to wherever possible achieve that sale – to the best purchaser; for the best price; in the best timeframe to suit the client’s needs.
Using Legally and professionally acceptable means and methods.
In response to your question yesterday I posted as follows:
‘ “Would you not expect that agent to tell the enquirer what they wanted to hear?”
No – unless “what they want to hear” is the truth – at which point, absolutely.’
You see, ducky – I don’t expect them to tell the enquirer what they want to hear unless it IS the truth – because as I have already stated above, anything other would be a breach of the basic Legislation that protects the public from such practice.
So why shouldn’t I agree that a potential buyer phone an Agent and make enquiries about an area?
In fact – I’ll go a big step further to what you will no doubt claim damnation and state that they should phone ALL the Agents in that area. Nowt better than a consensus of opinion to cement or destroy a person’s confidence.
Because your question was not specific. Your post suggested a general enquiry about a general area with “AN” Estate Agent – you said nothing about it being the actual Marketing Agent of a specific property – did it?
Even if it was – as I have already stated, I would expect that agent to respond in such a way that did not mislead the person asking the question, for the reasons previously given and reconfirmed in this post.
Now you may feel the need to continue to try to make out that that this completely contradicts what I said in 2014 – and that this is all the proof that you need that I have somehow mutated into some kind of disingenuous monster because of those nasty-pasty PurplePeople – but I challenge you to run that data through any program you can lay your webbed mitts on and get it to spew out anything other than “computer say ‘no’ “.
Only one party came to this discussion armed with an hypocricy and bitterness-laden agenda, ducky – and I’m sorry to point out the painfully obvious – bit it ain’t this poster.
The Australian arm of Purplebricks has been hit with a $20,000 (£11,215) fine by Trading Standards. Only the start Ducky.
“The Industry that required its own Act of Parliament…”
That is soooo 1979, ducky… try to keep it relevant to today’s news, please.
“…and has its own department at Trading standards.”
Didn’t have – until recently. Certainly didn’t before the birth of NSPR Listing Facilitators. Even in the dark days when PMA threatened to shut us all down for the heinous crime of ‘flowery descriptions’, we all dealt on a local basis with our friendly neighbourhood TSO (unless we were a corporate, that is).
Oh – and we didn’t need to be policed on #portaljuggling either, or have it written into various Codes of Conduct. Must have been a more transparent and honest industry then – before all this ‘disruption’…
#duckshoot
PeeBee,
Forget the murky past if you want, let’s just go on your own comments about how trustworthy Estate Agents are….
http://forum.building.co.uk/forums/showthread.php?tid=4824&pid=22000
PeeBee: “Don’t ask a homeowner who is selling, OR an Estate Agent – they have a vested interest in telling you what you want to hear”
If the question is “Would i trust an estate agent?” I think the answer is, i wouldnt completely rely on something i was told when looking at buying anything (House, car, TV, certainly anything costing a significant amount) as the person selling obviously has an interest in making a sale. What I would do is use the information i was told to aid my research into my query.
Estate agency like car sales etc, has a bad reputation for honesty, but anyone who cant be straight down the line is only kidding themselves in the long run. But likewise, someone who wants to buy a car, and solely relies upon the “advice” from the sales person is naive.
ducky
It really wasn’t worth posting that link twice.
Once was one too many times.
Now you’re just making yourself a sitting duck.
On. http://www.ISE.co.uk site from Bandit1 – today at 15.03
‘You are such an idiot Cyberduck. Suggest that if you don’t know what you are looking at or where to look or interpret the data don’t bother!’
I think the guy has a problem Peebee, he just seems to like going on to websites winding people up, don’t rise to it, just ignore him and hope he goes away.
Seems Bandit1 has sussed him out too though.
davethehedgehog… it’s a bad habit – a cross I have to bear. And one that others have inflicted upon them as a result.
I really should apologise to all those who have to suffer the consequences of my weakness – but I’m also the world’s worst procrastinator.
One day. Maybe.
Who knows.
Ducky, somewhere in this thread you posted “So would you advise somebody to phone up an Estate Agent with enquiries about the local area that a property is listed in? Would you not expect that agent to tell the enquirer what they wanted to hear?”
Answer: No and NO. Up to them where they want to buy and to decide what enquiries they want to make. As to what they wanted them to hear, depends on what they asked and it should be truthful to the best of thier ability.
Reverse roll Ducky, If someone phones you up about Purple Bricks and its failure to confirm how many properties it has actually sold, has it been reprimanded by advertising watchdog and done it more than once, its recent hefty fine by trading standards for malpractice … the owners now live abroad and the duo brothers on the telly were in fact actors…. are you going to confirm they have not paid out any dividends to investors, the owners now live abroad and the duo brothers on the telly were in fact actors and most importantly … all the false TV adverts about them being the same as High street agents isn’t true …. Would you confirm these facts?
Brilliant Woodentop….Also are PB’s LPE’s more honest than us Estate Agents? Of course In Cybermans mind they would never lie!
cyberduck46
Retiring for the day now.
Plenty of time to answer my question!
Give it another year of increased advertising, exposure and customer take up and Purplebricks are bound to come up with a no sale no fee option as well as the one time fee. That’ll be the next big step in their fight for a significantly bigger market share. I reckon that’ll be a game changer. They’re not going anywhere and us high street agents need to be right on top of our game.
Once the piggy bank is broken, you will start to see these online agents struggling. High amounts of investors money is why they are still standing, there is no other reason.
Well lets not let a few salient facts get in the way of a good story
Acccording to Yopa’s website this morning they have 6,423 listings seemingly a 100% uplift according to the author in a month which doesn’t seem to indicate they are firmly in the “runners up “spot when the race has only just begun
The number of LPEs at Bricks has rapidly increased to 740 The growth in instructions has kept in step and not accelerated recently
I agree with one element of this piece completely, dont confuse the customer with too many options. High street agents should stick to our core values and ethics and not get confused with trying to compete and offer some sort of bodge it and scarper pay up front offering.
I however also completely disagree with one thing, in 5 years time there will be less choice. Many of the call centre agents will have fallen by the wayside in 5 years. During this time if companies arent making a decent amount of profit, investors will lose interest and companies will struggle. I also dont see many new call centre style agents entering the market due to the enormous cost needed to try and make a dent