After one of the flattest years for some time, most agents will have been happy to wave goodbye to 2019 and ring in the New Year with relish.

It’s also the time of year that I look back on the predictions I made for the industry 12 months ago and get out my crystal ball to gaze at what this year holds

£121m down!

We knew that 2019 was going to be a tricky one for the industry with the fallout from Brexit and the ban on tenancy fees. I’ve looked at the most recent stats for the top ten mid- to large-size agents who publicly report their results.

They cumulatively made £121m less profit in 2018 than the year before, exacerbated by loss-making Foxtons, Countrywide, Leaders Romans and Purplebricks.

I predicted a year ago there would be 18% fewer agents and more consolidation in the market.

We’re now starting to see this come through.

After posting a pre-tax loss of £17.2m, Foxtons recently announced the closure of branches in Barnet, Muswell Hill, Surbiton and Richmond, coming hard on the heels of shutting its flagship branch in Park Lane last year.

The company, which once had 67 branches, is now sliding backwards and is in the 50s. Meanwhile, its rival in the capital, Dexters, has over 70 branches and, I predict, will become the largest agent by market share in London in 2020.

As for Countrywide, I said a year ago it would have to start selling off bits of its business to survive and my view is it will have to crack on with that this year.

They’re now selling their commercial arm Lambert Smith Hampton, with over 40 offices and 1700 staff. Presumably, the money they make will have to be used to pay their debts, which won’t leave much for investment in the business. It needs at least £50m to get it back on track – which means they’ll need to sell off more of the family silver.

As for the share price, it now stands at 350p – instead of the 7p just before Christmas. But that’s only because it has undertaken a share consolidation, not because its performance has improved. They’ll need more than the Boris bounce, they’ll need a miracle.

Leaders Romans saw their losses widen from £21m to £30m – which is worrying when it needs to pay back £265m debts within the next five years. I’ve already voiced my concerns over its future and foresee the closure of poorly-performing branches and sell-offs just like Countrywide.

The good news is that the market will get moving again in 2020 on the back of the Tory landslide, which is great for the industry, and I predict house prices will rise 4-6% as a result.

2.     Fee hike for internet agents

I also said that online and hybrid agents will have no choice to put up their prices in order to make money. And guess what? They have! Purplebricks hiked their fees by 11% in October, up £100 to £999 outside London and £1,499 inside, irrespective of whether they sell your property.

But I believe they’re going to have to change their fee structure if they want to recoup their losses, which increased from £29m to £56m. Perhaps they and other internet agents will move to a much smaller amount up front, say £499 including VAT, and a success fee if sold at around £1,500 inc VAT.

Given the lack of real competition, it’s easy to predict that Purplebricks will continue to gain market share. However, as they narrow the price gap with High Street agents, customers will inevitably think twice about the gamble they take. The stock market has.

Purplebricks’ share price, as I write, sits at 129p – compared to 140p this time last year and its all-time high of 513p.

I also warned a year ago that Housesimple would waste loads of money trying to chase Purplebricks – and they have. They’ve widened their losses from £9m to £19m off the back of their failed experiment in the north and midlands to sell properties for free and make money on referrals.

How much longer can they survive?

The reborn Emoov is trying to compete at £895, so where’s the profit in that? I predict Yopa at £999 will also have to move to a much higher fee too if they are to be sustainable, having widened their losses from £18m to £30m.

House Network, at £895, went into administration in March 2019 only to be bought out and restructured.

I wouldn’t be surprised if easyProperty and House Network disappear from our memories, along with many others from the corporate, franchise and hybrid worlds with lots of money wasted and written off. It’s still the Indies that have it and it is hard to see it changing in the coming years.

The big question in my mind is which online agent is going to end up in the internet graveyard soonest, alongside Hatched?

3.     US franchisees under the spotlight

I continue to wonder how the US franchises make any great impact in the UK. When I last looked, Berkshire Hathaway’s Homes Services Kay and Co had 71 properties on its website, Keller Williams had 204, RE/MAX had 337 while Century 21 had 868.

New US entrant EXP Realty have made little impact so far with only 107 listings, according to Rightmove.

Agents such as Keller Williams appear to have lots of agents but few listings per agent – which is typical of the American model where agents often have second jobs to make ends meet. My forecast is that they will run out of money in 2020 and will need to plough in more investment.

4.     Marketing needs to be slicker

With the market heating up, I predict there will be more investment in Customer Relationship Management (CRM) and lead generation systems.

Agents need to be quick off the mark when it comes to portal leads, contacting prospects within 90 seconds. Remember, if you snooze, you lose; those that make contact will get the business.

I also foresee that data and Artificial Intelligence (AI) will play a far bigger part in our marketing, making the most of Facebook and Google algorithms that help you to track your customers more easily and pop up on their devices when they are looking. Tracking and remarketing will help keep you front of mind.

We’ve already invested heavily in the deeper integration of our social media platforms and our CRM to get a much better view of prospects who are online.

Google also plays a massive part in customer search. Those who put effort into their Google My Business presence, Google Display Network, Google Accelerated Mobile Pages and Google Reviews will find their performance will improve considerably.

We’ve analysed our own performance here and our branches have 9,000 Google, Trustpilot and Facebook reviews averaging 4.8 out of 5, which generates 5,000 calls a week. It’s massive.

Processes will need to become slicker, with better dashboards, online viewings and automated customer notifications of updates. Websites and portal content needs to be maintained, as do texts, emails and phone calls.

Whatever happens in marketing and technology, at the end of 2020 it will still be a people-based business, ‘people powered by technology’, despite what Google and Alexa might have to say on the matter!

• Paul Smith is founder and chief executive of Spicerhaart