Carphone Warehouse founder ploughs £5m into online agency

| Rosalind Renshaw

Carphone Warehouse founder Sir Charles Dunstone has invested £5m into an online estate agent.

The investment, made with Dunstone’s business partner Roger Taylor, has benefited HouseSimple.

Dunstone, who is chairman of TalkTalk and Dixons Carphone, said: “We believe estate agency is going to change considerably, with the future increasingly belonging to online estate agents.

“We like HouseSimple, we like its management and we like the idea of saving Britain’s home sellers billions of pounds, with a better experience.

“HouseSimple has the potential to be one of the industry’s real online winners, and we intend to be a core investor to help it achieve its full potential. That is what our investment today signals.”

HouseSimple, which says it provides a full estate and letting agency service priced at between £290 and £475, operates online and through a network of 160 HouseSimple local agents.

The firm says it has quadrupled its revenues in the past two years, and believes that online estate agency’s market share will grow from around 2% currently to over 20% over the next five years.

Alex Gosling, CEO of HouseSimple, said: “Online estate agency is a market whose time has come. People are fed-up with the expense and poor customer service of the high street agents.

“We sell more of our properties than high street agents, we achieve a higher asking price, less of our sales fall through, and we have much higher customer satisfaction ratings. To top it all, we only charge one tenth of the price they do.

“With Charles’and Roger’s backing, we can now turn on the growth tap and save our customers an enormous amount of money and hassle.”

The £5m investment into HouseSimple follows a new £1.5m cash injection into eMoov by venture capital firm Episode 1.

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29 Comments

  1. Trevor Gillham
    January 22, 2015 at 07:19

    I agree it is the future but I don't think the future is with nationwide agents, I think small local agents with no high street presence will be the future, offering a very personal service, viewings etc the same as the high street agents do now. Well done anyway to HouseSimple on this investment.

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    1. phoenix
      January 22, 2015 at 08:13

      I couldn't agree less. Your basically suggesting that the evolution of our business will be to adopt the American model that sees 'realtors' operating from their coffee tables. If that's your ambition for our industry I really do fear for us all.

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      1. Trevor Gillham
        January 22, 2015 at 08:18

        Yep, that's what I think will happen. No need for an office, the agent can pop round.

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        1. Trevor Mealham
          January 22, 2015 at 08:24

          The office still plays a role in the Realtors work place. The big difference is the Yank agents ability to cross share listings via making their softwares interoperable via plugging into a local hub knows as a mls. There are around 850 main mls's in the USA. It means local agents have greater access to stock and as premium sub agents establish a higher fee structure that the UK could adopt. A national UK MLS would see fees grow to 2-2.5% to then split. BUDGET agents could be excluded as they wouldnt have the higher fees to split.

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          1. wilko
            January 22, 2015 at 10:53

            The Australian industry also has retained emphasis on office presence. I don't agree that home agents will be the outcome. Regional "super offices" which cover, say 5 towns would be my "guess"….Those offices may be in large shopping centres like Westfield at stratford, or Metro Centre in Newcastle, Trafford centre and so on.

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          2. PeeBee
            January 23, 2015 at 06:16

            Don't you even so much as dare to think about basing me in that bl00dy Metro centre, wilko…! ;o)

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  2. GPL
    January 22, 2015 at 07:29

    Roll-up Roll-up… it's the drive-thru estate agency model! Large fries & a Semi Villa please….. that'll be 99p with our Super Saver Deal!….. and we're just as good as a real Estate Agent?…. Zzzzzzzzz… it's Groundhog Day…. investors and CEO's spouting forth as they hope to add further to their fortune! Yet another reason for real high street, town, city, village estate agents to dig-in and show the real difference that a real estate agent makes! Most people's most valuable possession and you hand it to the 99p brigade?… the art of pile them high, sell them cheap! This isn't estate agency….it is better described as Profit Making Direct!…. with the slogan…. we've got your money up-front, we don't care now! They should be charging 99p as that is the value they offer!

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    1. Trevor Gillham
      January 22, 2015 at 07:48

      ' we've got your money up-front, we don't care now! ' This is wrong as with their model they need to get that property SOLD STC otherwise within 6 months of portal fees they will be losing money.

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      1. Trevor Mealham
        January 22, 2015 at 08:06

        If the fees are peanuts. We all know the callibre of an average budget agent. Most are not salesmen. Just budget order takers from clients who buy into the cheap deal.

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  3. MF
    January 22, 2015 at 07:42

    "we like the idea of saving Britain’s home sellers billions of pounds". Why do they always spin us this line? They're in it to make money, pure and simple.

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    1. Trevor Mealham
      January 22, 2015 at 08:09

      BECAUSE it strikes a chord with sellers who believe it. BUT there is no reason a proper agent cant say we can do much more incl poss getting you a higher stc price or a better more solid buyer for a higher fee.

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  4. Trevor Mealham
    January 22, 2015 at 08:04

    £5m extra in the pot at a time RM and Z are looking to take more advertisers money due the recent loss of 1,000's of traditional agency models – um… So the two biggest consumer sites allowing extra paid for presence may go against traditional agents spending less on main portals……….

    Im not a budget model supporter but 4-5,000 agents sure are about to help the budget boys out……..I guess whilst the cats away………. OTM needs tk get a very big consumer message out there. Unfortunately RM and Z have way more agents and listings and the place that the budgets are banned from (rightly) is a threat to the budgets who have wads to spend.

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  5. BigRoyston
    January 22, 2015 at 08:15

    Guess there will be a load of High St agents not renewing any communications contracts they have with Talk Talk then !

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    1. Trevor Mealham
      January 22, 2015 at 08:28

      @BigRoyston : good point. But also think how many vendor and applicant calls are beng made through their phone network each day. BIG Data is a great way to manipulate data intel into other businesses partnered or aquired.

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  6. Harree
    January 22, 2015 at 09:55

    Why are online agents (and I'm not one) nearly always portrayed as working from a bedroom or coffee table? Like it or not the internet allows businesses to operate regionally or nationally, even internationally, from one office and that's where the likes of Emoov, Housesimple etc. work from. Mortgages, insurance, investments and the like which were once considered 'face to face' only are now largely advertised on the internet and transacted by phone from one office. EA's who believe houses can only be advertised and sold effectively by local high street agents should beware. Whilst there will always be a place for us there is no doubt imo that one of the onliners, backed by big money and highly successful entrprenuers, will become a nationally known brand. They will achieve that by mainstream TV advertising centred on the cost savings to sellers and the biggest change to traditional EA's will be a new awareness, and a reluctance, to pay traditional fees. …. It isn't a question of if, just when.

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    1. wilko
      January 22, 2015 at 12:48

      Harree, I agree with what you say.But at the moment, and there are a few that may be the exception, most online agents (individuals that are employed) are not skilled enough to do the job properly. About a year ago I mystery shopped all the major players and asked a series of questions that ranged from probate q's, valuation techniques, buyer verification etc and only 1 in 10 had knowledge to deal with these questions professionally. I also know of 2 that have closed near to us saying they couldn't afford to operate the model (there are more Nationwide). There may be a reluctance to pay traditional fees but there needs to be a wholesale change of thought from the discount agents because the fact is you cant provide a good service for a few hundred quid(£69 the lowest)….it just isn't possible….And one final thing….I know that a lot of high street agents would employ staff that may lack skills but I think we all know that most established independent high street agents would be better at tackling important selling issues than someone in a call centre on the minimum wage, trained to sell the idea rather than the property. As the internet plays more and more of a role in house sales I imagine that fees around £1500-£2000 may be the settle down point…..wherever an agent works from.

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  7. South of the City EA
    January 22, 2015 at 10:23

    After receiving £5 m investment I would be jumping up and down with joy! What does Mr Gosling do? He takes a swipe at high street agents. His quote is laughable. House Simple are a two bob call centre with 160 nobodies spread across the country. If Sir Charles Dunstone thinks its a good investment then good luck to him. I've got nothing against online agents. What I don't like is the constant bragging of how they have reinvented the wheel! If you've got the stats to prove you're better than everyone else, Mr Gosling then lets see them! No more sweeping statements please!

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  8. wilko
    January 22, 2015 at 11:00

    What these, and other investors, don't seem to realise is that you can't provide a house sale service for the fee. It's impossible. We have started to see online agents go bust or give up, in spite of investment. One of the greatest problems is you need skilled staff to provide a service to home sellers-and at online price this is not affordable. Phone and mystery shop any of the online models and the depth of knowledge is almost non existent. Even if these facts don't influence investors then surely they are capable of seeing the tiny penetration (still stuck at 2%) that online agents have made since their inception 10 /11 years ago.

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  9. GPL
    January 22, 2015 at 11:42

    What I see currently are 4 distinctly different businesses… No 1 Estate Agents – professional (although I accept not every single one!) high street estate agents who provide a full estate agency service and ALL that entails. No 2 Corporate Estate Agents involved in The Duopoly who pretty much see homesellers as a secondary to their thirst for profit at any cost. No 3 Online/Internet Property Listing Companies who are best described as the a Lightweight Listing Service! and No 4 The emerging Online Property Listing Companies funded by entrepreneurs/vultures who see the opportunity of adding to their millions/billions. As long as we are clear there are Estate Agents and the rest who masquerade as estate agents when they are just sales people placing online adverts and skirting around the fringes of a sudo estate agency service! Oh, and the arriving Have a Nice Day Americans?…. if it looks like a burger, tastes like a burger it must be a burger?!….. a certain famous Open Golf Resort in Scotland now owned by a Famously Haired Entrepreneur!… in my experience there recently, cost up, quality & service down however a monmental amount of spin on how much better they and everything they have and will do is going to be soooo much better than before! Forgive me for my Dinosaur approach are real estate agents providing real service dead or dying?…. must be give in to the spin that the internet is everything and human beings secondary…. well I am better than the internet for soooo many reasons that clients appreciate and I can withstand a cyber attack!….. I just keep working!!

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  10. surreyagent
    January 22, 2015 at 12:00

    you cannot make money charging under £500 per sale……………end of!

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    1. wilko
      January 22, 2015 at 14:38

      "The investment, made with business partner Roger Taylor"……who, I bet, wouldn't play the drums for less than £500 either!

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    2. Trevor Gillham
      January 22, 2015 at 14:44

      I made a fantastic amount of money charging £299+vat, my system allowed me to run a super efficient business with just 2 people, over 800 properties!
      I was taking on 15 a day some days, it only went bad for me when i got screwed by Rightmove when they doubled my membership fees to £12k

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      1. Taff
        January 22, 2015 at 17:00

        So you made at least £239,200 (800 x £299) but it all went pear-shaped when being asked to pay £12,000 a year to RM. Correct?

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  11. RealAgent
    January 22, 2015 at 16:23

    As Charles demonstrated with Talk Talk, trying to deal with volume business ultimately leads to poor customer service. What really irritates me is when companies like house simple add the addendum of poor customer service as their justification. Thats just simply not the case, they are a cheap medium to get a property advertised that I give them, but customer service? They are not dealing with anywhere near enough properties to be judged on "customer service". The field reps are all fired up and thinking they are involved in the next big internet revolution and probably are available for some customers to contact, what happens when three years down the line if they are still going, their reps are just in it for the listing as thats what they are paid on, what interest then will they have in "customer service" You know when I read articles like this I want to say good luck to the guy if he's managed to secure some major investment, but then I read what he feels he needs to add and I just think what a t*at.

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  12. Robert May
    January 22, 2015 at 22:10

    "Dunstone, who is chairman of TalkTalk and Dixons Carphone, said: “We believe estate agency is going to change considerably, with the future increasingly belonging to online estate agents.

    “We like HouseSimple, we like its management and we like the idea of saving Britain’s home sellers billions of pounds, with a better experience."

    I wonder where Mr Dunstone has his motor cars serviced, let me guess it is not cut price Clive who used to work in the main dealership for a few months, I am fairly certain he won't be Googling Rolls Royce ECU replacement vids on Videojug but I would be fairly confident he is shelling out to have the job done properly. So far his wealthy contemporaries and their sidekicks have failed to name a SERVICE industry that has be fundamentally changed by the internet, I wonder if the Housesimple crowd can think of one?

    Retailing multiple million units at micro margins is slightly different to servicing a restricted transaction market, currently about 1.2 million units per annum where the actual product is defined by experience , competence and credibility rather than the cost. Anyone experienced and capable of pulling in 5 completions per week and 10 sign ups is unlikely to be the sort of character who is satisfied to work for the UK average wage. There is a fundamental disjoint between volumes and the fee structure along with an increasingly crowded passive intermediary sector, all that combines to suggest Sir Dunstone is either in receipt of bad advice or has been too quick to copy Stellios into a sector he doesn't understand.

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    1. PeeBee
      January 23, 2015 at 01:08

      Nail: Head – and brilliantly put to boot!

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  13. PeeBee
    January 23, 2015 at 00:20

    "The investment, made with Dunstone’s business partner Roger Taylor…"

    Jeez – Queen are one of my favourite all-time bands – I feel betrayed!

    Mind you – they'd have been WAAAY more spectacular with Keith Moon on skins… ;o)

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  14. PeeBee
    January 23, 2015 at 00:57

    “We sell more of our properties than high street agents…" REALLY?? My branch is currently selling 91% of instructions – what's YOUR success rate?

    "…we achieve a higher asking price…" WHOOPEEDOO! – you 'value' a property higher – so what? Isn't that simply because you state on your website that whatever Mickey Mouse figure your "valuation report" plucks out of thin air, you'll market at whatever the vendor wants to fly his or her kite at? What percentage of INITIAL ASKING PRICE is the ACTUAL SELLING PRICE of your last 50 sales agreed? Mine? 97.37%, before you ask….

    "…less of our sales fall through…" What LESS than 8.2%?

    "…and we have much higher customer satisfaction ratings." I don't beg for compliments – I don't write my own either.

    "To top it all, we only charge one tenth of the price they do." Erm… actually I just blew up your system – got your fee to £946.80 BEFORE ******** me for a board (ANOTHER thirty quid) and any of your little menu of add-ons you hide away 'til last… which is putting your UPFRONT, NO GUARANTEE WHATSOEVER OF ANYTHING charge at about HALF of my SUCCESS FEE – and you CAN'T OFFER LOCAL SHOP WINDOW OR PRESS ADVERTISING – even as 'extras'. All INCLUDED with my company.

    And I'm the most expensive Agent in town. For a reason.

    Dream on, Mr Gosling. Keep saying it often enough and one day even YOU will believe the ********.

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  15. Ajax
    January 25, 2015 at 17:06

    And now he joins the chorus of disapproval of OTM. Has there ever been a launch that has attracted so much negative comment from those with a vested interest to see an initiative fail?

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