Hatched founder says he still believes in online agency business model

Hatched founder Adam Day spoke yesterday of his disappointment that it is closing – and said he still believed in the business model, despite Connells saying it did not work financially.

Separately, Purplebricks emphasised its ongoing investment in its own business, saying that in the UK it is both sustainable and profitable.

Day, who had previously worked for a high street agent, founded Hatched in 2006 as what is thought to be only the second online agent in the UK.

He sold it in 2015 to the Connells Group in 2006.

He said: “Connells were a huge support to me and the business when they acquired Hatched, and it’s great news that those staff who worked so hard for me before acquisition and since, are being offered alternative employment within the group.

“From a personal point of view, I’m obviously disappointed that the business has closed as Hatched was one of the original pioneers of online/hybrid estate agency.

“I truly believed in, and still do believe in, the model that I created back all those years ago.”

Day is now head of estate agency at Emoov, joining in June after a year-long spell at easyProperty. Emoov itself declined to comment on Hatched’s closure.

However, a spokesperson for Purplebricks told EYE: “Purplebricks has in the last four years built a sustainable and profitable UK business, based on a new, fairer, more transparent model which has saved our customers over £108m in commission payments in 2017 alone.

“We are successful because we get results for our customers, with recent data showing that we sell more houses and complete on properties more quickly than any of the other top ten brands.

“Our ongoing investment in technology and people continues to win over more customers, driving further market share growth.

“Purplebricks is proof that the right people and quality execution has been key to why we are the most successful estate agent in the UK in such a short time.”

Sam Mitchell, CEO of Housesimple.com, said he disagreed with Connells’ view that the online/hybrid model generally doesn’t work, but did agree that upfront fees are not the right solution for customers,

He said: “That’s why earlier this year Housesimple became adopted a No Sale, No Fee only model.

“And unlike the high street agents, who still charge home sellers a percentage of the sale price which can run into thousands of pounds, we only charge a flat fee of £995 whatever the value of the property.

“At the same time we offer great customer service and support the home seller from start to finish, to ensure a smooth sales progression.”

Meanwhile City analyst Anthony Codling, of Jefferies, reiterated his ‘underperform’ rating of Purplebricks after yesterday’s announcement of the closure of Hatched.

Codling gave a share price target of just 94p for Purplebricks shares.

Codling said: “Connells, one of the largest and most profitable estate agents in the UK, has pulled out of the hybrid agency market saying that the online model is not commercially sustainable, echoing our long held view.

“This is likely, in our view, to add to Purplebricks woes this week.”

Despite this gloomy assessment, Purplebricks shares yesterday closed up 3.3% at 230p.

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22 Comments

  1. Property Poke In The Eye

    It’s becoming clear DIY Vendor packages by PB, Emoov, House Simple Tepillo etc are not disruptors after all.

     

     

     

    Interesting read, search:

    https://www.fool.co.uk/investing/2018/07/05/why-id-still-dump-neil-woodford-favourite-purplebricks-at-a-share-price-under-300p/

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    1. Bless You

      If gov’t woke up and banned payanyway these criminals would last about 3 months. No sale no fee would stop the public being misold on tv and at valuation.

      They would them be fed to the lions. I expect 90% of customers would ditch them after a few weeks if weren’t duped into payanyway contracts.

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  2. Moveaside01

    If Day is so convinced his model works, why doesn’t he stick his own money where his mouth is?

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    1. ArthurHouse02

      Ha, this isnt how the call centre lot work, they prefer to use other peoples money

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    2. ARC

      Actually I understand that he has made Connells an offer and they have said no appears they would rather close it and put almost half the staff on notice of redundancy.

       

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  3. ArthurHouse02

    Connells say they sell more property than anyone else in the UK, Purplebricks say they sell more….somebody is lying!

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    1. Ric

      It’s all lies… I sell the most.

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      1. AgentQ73

        No you don’t I do and I’ve an independent report to prove it. Obviously I won’t share said report.

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        1. Ric

          Well, you will be hearing from my solicitors if you ever say that again AgentQ73. 😉 

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          1. AgentQ73

            There’s no need for that can we not resolve this informally?

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            1. Ric

              haha… at first I thought NO! “It’s just not fair” but now I think…. “how much we talkin?”… coz everyone has a price and to be honest…. I’m cheap! (Sod off those who know me) 

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              1. NotAdoctor32

                I’m Brian, and so is my wife

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  4. Paulnight12

    It really does seem now that the pb cards are falling, just as many thought they might. Wonder if they will be around during the windy weather this time next year.

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  5. Ric

    If people sometimes hear what the want to hear, I wonder if today they will read what they want to read? (1 line, 2 views, 1 hope)
    The Actual last line of this story…
    Despite this gloomy assessment, Purplebricks shares yesterday closed up 3.3% at 230p.
    Last line when read by PB LPEs…
    assessment, Purplebricks shares up 3.3% 
    Last line when read by High Street Agents…
    gloomy assessment, Purplebricks shares yesterday closed at 230p.
    Last line we hoped for…
    gloomy Purplebricks yesterday closed.

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  6. jeremy1960

    The frustration of all these reports is that whenever anyone from burble *ricks comments all they can come up with is something along the lines of “we’ve saved our customers 11 billionth pounds in commission ?”

    To me that says that all of these Internet based companies are interested in is cheap cheap cheap, never a mention of customer service other than pointing towards heavily biased reviews often extracted prior to anything significant happening other than someone having turned up to chat and do details !

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    1. smile please

      As we know PB only sell 1 in 2 properties somebody should work out how many they have listed and times that by their average fee and divide by 2

      We can then say purplebricks have cost sellers X millions of pounds due to them having to pay and not moving.

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  7. surrey1

    Captain of the Titanic maintains she’s unsinkable as keel protrudes vertically from the water.

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  8. El Burro

    ‘He would say that wouldn’t he’, Mandy Rice-Davies I believe.

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  9. Property Paddy

    funny how this story is about Hatched but all we ever talk about it purple plonkers to be fair they are the only ones who really got our attention and as the share pundits in above comments confirm even they are heading south.  3.3% rise paff !  3.3.% up when they were twice the price a year ago.

     

    Who’s kidding who?

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  10. Hillofwad71

    Well  embarrassed might be  more appropriate than  disappointed    Hatched ,Easy Property and now Emoov where they are taking barely 400 instructions per month. Since his arrival whereas before there had been an exodus for LPE’s from Bricks to Emoov n this bus has  now gone into reverse.

     

    Long standing  LPE in North East has jumped ships for Bricks In August

     

    https://www.linkedin.com/in/kath-taylor-39067894/?originalSubdomain=uk

    https://www.emoov.co.uk/team/ She still appears today as part of the team on Emoov’s website!!!

    Lee lasted 3months before off to Bricks

    https://www.linkedin.com/in/lee-hassan-21085b22/?originalSubdomain=uk

    Tim 4 moves in less than  6months ! Bricks  – back on dry land  at Reed Rains. Emoov for a couple of months and now back at Bricks  as LPE for a different area The poor lad must be dizzy

     

     

    https://www.linkedin.com/in/tim-dyke-1024467b/

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  11. cyberduck46

    >Codling said: “Connells, one of the largest and most profitable estate agents in the UK, has pulled out of the hybrid agency market saying that the online model is not commercially sustainable, echoing our long held view.

     

    Didn’t Anthony Codling say that CWD were doing the right things when they were expanding their hybrid model?

     

    http://www.propertyindustryeye.com/newsflash-revenues-and-profits-plunge-at-both-countrywide-and-foxtons/

     

    “City analyst Anthony Codling, of Jefferies, said of Countrywide that it “is doing the right things” in “taking out costs, offering complementary digital services and growing the financial services division. However the costs of this strategy are being felt before the benefits and whilst it is difficult to see Countrywide receiving any help from the underlying housing market, we do see silver linings amid the clouds”.”

     

    What a short memory Mr. Codling has. That was only about a year ago. The share price has dropped about 90% since then. Some silver lining that!

     

     

     

     

     

     

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  12. J1

    Headline

    mad person exholts mad views in mad world that only mad people understand

    the end

     

     

     

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