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.