A leading figure in the property world has warned that next year the industry will face its toughest since the crash of 2008.
Industry consultant Richard Rawlings said that the market will survive Brexit, higher interest rates, industrial unrest and anything that Trump might say.
However, Rawlings warned, the industry is on collision with itself as online agents gain more market share.
Rawlings told EYE: “Online agencies are gaining traction, and may rapidly continue to do so.
“Yet so many agents appear unfazed by this threat to their status quo, dwelling on the fact that people will ‘always need a real local expert, sales progression, negotiation skills, etc’.
“But maybe, just maybe, they don’t.
“Why shouldn’t the public apply the new rules of engagement to agency as they have to almost every other sector of consumerism – ‘I want it all, I want it now, I want it 24-hours a day and I want it cheap – or even free, even at the expense of quality’.”
Rawlings said: “The online agents’ bark may actually be worse than their potential bite.
“Not everyone will want to use an online agency, but most people are now aware that cheaper alternatives to the high street agent exist. This makes regular agents look expensive by comparison. Too many weak agents have allowed this apparent threat to reduce their fees to globally pathetic levels.”
Rawlings also said that the new sharing society means people talk about their experiences on multiple social media channels. “Talk is cheaper than ever before, so that even the slightest opinion, niggle or compliment can ricochet around the land within seconds.
“Its power over an agent’s reputation is immense. Yet while many agents regard themselves as social media savvy, they miss the point. Their communication may be improving, but they are communicating messages that damage their business.”
Rawlings said that many agents will go to the wall because of sheer indifference.
He said: “Indifference kills business. At a time of exciting changes in consumer attitudes and behaviours, agents who don’t take a stand or put their head above the parapet may not get shot, they’ll just get sick and wither away. A natural culling process.”
Rawlings also warned that while the fees ban has been long expected, many agents are still unprepared for the “financial shock” it will bring.
He said these agents were mostly those who expanded into lettings during the last recession.
Rawlings said that in the tough trading environment he expects next year, agents will not just have to change, but show generosity. He said this could mean showing buyers around other agents’ stock, ditching fixed term sole agency agreement, or introducing a voluntary fees regime.
He added: “The overriding problem is that in respect of all the above, many agents would say ‘That’s not me’.
“Ahem, yes it is!”
* Rawlings will be on a ‘Saving Sales Tour’ in the first quarter of next year, when he says he will be showing agents how to insulate themselves from the icy times ahead. It starts in Leeds on January 16, and goes on to Exeter, Tunbridge Wells, Cheltenham, Croydon, Welwyn Garden City, Bath, Oxford, Norwich, Romford, Guildford, Reading and Cambridge, before finishing in Canterbury on March 28.
Rawlings said the seminars would be a “real cage-rattler”.