GetAgent.co.uk has been tracking the real-time health of the UK property market as a whole via its interactive dashboard, along with a market sentiment survey of both agents and home sellers and buyers; the latest of which is due for release this week.
The latest data on current and historic listings by online agents suggests the sector could be in serious trouble, despite their potential ability to better traverse the problematic landscape caused by the current pandemic when compared to bricks and mortar agents.
The data shows that the estate agency profession is having it tough right now with no listing appointments permitted, no viewings and few completions unless they are subject to ‘specific unavoidable’ circumstances.
Revenue has all but dried up and most agency staff have been furloughed.
But, amidst this downturn, there is one segment of the industry that is having it even worse and that’s ‘online estate agents’.
The data suggests that: –
PurpleBricks’ new monthly listings, as the flag bearer in the online agency space, peaked way back in April 2018 at 6,358 in that month.
Since then, their new listings rate has declined to a pre-Corona average of 4,400 per month (January and February 2020 avg). Importantly, in overall market share terms, PB’s share versus the entire estate agency sector has dropped from a peak of 4.25% in August 2019 to just 3.45% in February.
What does that also mean for revenues?
GetAgent say the drop in listings for which PurpleBricks earn an average £1,100 means that they are on course for a comparable reduction in calendar year on year revenue of c.£7.8m per annum (or 11%) when they next report (total 2018 listings of 65,279 vs total 2019 listings of 58,162 x £1100).
But the real focus will be on current listings performance which has simply got worse even before factoring in the decline in new business as a consequence of the lockdown.
At just 4,400 listings per month now (vs a 2019 monthly avg 4846), this is a further dilution in revenue of an annualised £6m.
Total market share for all online estate agents has dropped from a peak of 6.35% in September 2018 to just 4.8% in February 2020.
Total listings ’lost’ by online estate agents in 2019 compared to 2018 was 17,286.
YOPA – listings are down 21% year on year and their market share is down from 0.65% to 0.61%
HouseSimple – listings are UP 156% year on year and their market share is up to 0.61% from 0.21%.
However, this increase is at the expense of actual revenue given that they became a free service in 2019.
Founder and CEO of GetAgent.co.uk, Colby Short, says:
“Estate agency as a whole has never been short of its critics but this criticism certainly seems to have shifted towards online and hybrid agents over the last few years.
“This is always going to happen as an industry evolves and there is no doubting that the online model provides a very cost-effective method of transacting when compared to the traditional agent.
“However, this more DIY approach to selling does have its pitfalls. Many customers feel as though they’ve been left a little high and dry when it comes to the completion of a sale and that they didn’t achieve the price they would have otherwise.
“This seems to have had a knock-on effect on the popularity of online agents with even the industry leader, Purplebricks, seeing a steady decline in business.
“With yet more uncertainty now shrouding the market, it’s likely that many home sellers will value the professionalism, service and accountability that comes with a traditional agent and the online market share will continue to suffer as a result.”
This story was originally embargoed from publication until tomorrow morning but because it ‘leaked’ the embargo was lifted by the PR company.
Purplebricks declined to comment on the findings as their Results are due out in early July.
“GetAgent say the drop in listings for which PurpleBricks earn an average £1,100...”
Where did they get that figure?
UK ARPA* for FY ending 30th April 2019 was £1243
UK ARPA* for HY ending 31st October 2019 was £1353
The figure for FY ending 30th April 2020 will be higher as prices were hiked by £100 six months ago.
*Average Revenue Per Advertiser
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What do they mean ‘earn‘?
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On line agents, particularly PB’s when they launched with enormous capital resources, had an ENORMOUS opportunity to disrupt the industry (as Rightmove’s arrival did for property advertising). However, fortunately for the traditional sector (perhaps?) they made in my opinion two fundamental errors:
1They priced their service at a level that almost guaranteed that they could never make a sensible return on capital.
2 They employed far too many failed traditional agents as LPE’s who’s “expertise” could be comfortably set out on a postage stamp, with plenty of room to spare.
My brilliant agency trainer colleague at Cwd had a wonderful turn of phrase for many things. One I remember is that it’s very difficult to train a pig to sing! Far better to shoot the pig for bacon and buy a canary!
PB’s initial (like or loath them) inspirational leaders then compounded the problems by overly ambitious and premature international expansion.
Net result today is that on-liners are a near total irrelevance to an industry that must reverse the downward fee spiral to prosper.
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I have to say Harry there were a handful of really great agents who subsequently earn far more than their high street counterparts.
Though I agree there are some terrible agents and some of whom remain as Territory Operators. One as an example had zero agency experience when being taken on and has a horrible attitude.
The party stopped when Mr & Mr Bruce left the building and their biggest error for the business was the IPO. However they did well out of it and deservedly so with the work they put in. I have never in my career seen two people work so hard and be so available for the foot soldiers in the field.
The business now has got arrogant and stripped out all of its talent. They are left with Territory Operators who are good that I can count on one hand. Some of the rest wouldn’t last a week as a Branch Manager on the high street.
It was made clear some time ago that Purplebricks were to change their fee offering and given the new CFO having been put in place I think it will happen soon if they are to survive.
That said now its all about the money there and not about the customer. The founders had a genuine love for the customer and that left with them sadly.
One of the Sales Directors was talking to me last week and unfortunately is now the do as Alan Warren says show without autonomy. Not sure about you but given the title they have they should be afforded a bit more respect from Alan to do their job. All of them are after all vastly more qualified and credible than he is.
I truly have not seen such incompetence at the top in my whole career across many different customer service industries.
It is very sad but somewhat satisfying to watch from afar.
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“The founders had a genuine love for the customer and that left with them sadly.”
What.
An.
Utter.
Crock.
They “had a genuine love” for the customers’ money. End of.
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I’m sorry, clearly we have a different perspective. The founders had one aim; to make money no matter how. Like any leaders (good or bad) that involved motivating their troops and showing boundless enthusiasm/ belief in the project. The old adage that you can fool all of the people, some of the time holds true.
My opinion, is that this was a highly cynical get-rich-quick scheme that worked very well for the brothers (so far) and a few, select others at the top of the pyramid but, has been an unmitigated disaster for the vast majority of those they sold the dream to (customers and LPEs).
The publicised HMRC investigation continues, and, perhaps, some others? Who knows? This story hasn’t ended yet and brothers Bruce may yet find that they have questions to answer.
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In any case as outsiders looking in we will never know the realities of what went on as seemingly nobody will talk about it who leaves.
I have to say though their demise would be good for both Estate Agents and customers alike.
It has done nothing but drive agents out of business and cause distress to many people.
Ultimately as a long term viable proposition in my eyes it has failed.
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Reality has driven home that a monkey can provide a listing but actually completing the sale of a property is a different matter. Where have you heard about the online agencies devoting the proper resources for sales progression and in the case of Purple Bricks there was no incentive to do so as the money was made from the upfront fee.
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Not sure High Street agents where I live and trade would call online agents an irrelevance…having been the number 1 agent for the last 14 years….I work from home and sell 100 properties on average every year, average fee is £1500. Its all about the right person and if you are good enough it works!…be you own boss,
Harry Hill will vouch for me. Richard Spiller, Red Homes Honiton.
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Well done to you Richard!
I would say your success if likely not down to online vs. high street. I would say its likely because your liked by the your local customers. Nothing better than word of mouth.
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Number 1 Agent?
In terms of self-fluffery – YOU DA MAN!
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My old friend…lol….hope you’re not suffering too much!
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Sorry to disappoint – but suffering isn’t in my vocabulary!
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Glad to hear it…keep up the good work
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I believe I do “good work” – doing my bit rooting out the liars, cheaters and charlatans of our industry and showing them for what they are.
In fairness, t doesn’t take much – those that shout they are the best usually aren’t – once you identify the shouty ego types the rest flows like the Amazon.
Those that throw stones in glass houses tend to do so for the wrong reasons – and those reasons generally jump up and bite their @rses.
I just start at the ankles and gnaw away.
Looking forward to further ‘chats’, Sir!
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I just did the biggest yawn……..
I remember from our previous chats, you give it the large one and then cry away when I ask you who you are and which agency you work for….lets see if you are brave enough to let me know..
You know who I am and my company I have nothing to hide, the figures and facts speak for themselves and you know I only comment when the debate over High St v online gets a bit out of hand and I need to put the high st boys back in their place etc….
Be brave you can do it, name and agency???…c’mon you have nothing to be scared of….or do you?
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“the figures and facts speak for themselves…”
No – you are quoting figures you claim as fact. BIG difference.
I’m PeeBee – and have been to friends since Primary School. Foes can call me what they like – I don’t offend easily.
And I don’t work for an Estate Agent – so I have nothing whatsoever to be ‘scared of’. Nor did I when I was an Agent – stating the truth isn’t scary. Hope that helps.
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…even bigger yawn than last time…..didn’t think you would enlighten us.
…carry on hiding behind the the silly name.:-)
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I have no reason to hide. I am who I am. Who I am is irrelevant. If what I say is incorrect – then I am happy to be corrected.
Bring it on, sunshine – put old PeeBee in his place. Bigger and better than you have tried – so feel free to make a real name for yourself.
Just remember the law of unintended consequences.
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Please read previous message…..
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Now you’re boring me – and that takes some doing!
Read mine while you’re on.
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YAWN……
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Right back at ya.
Go sell a house – you’ve got a 14-year average to keep up, haven’t you?
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YAWN….
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Don’t tell me – you’ve done your ton already.
If that’s the case, that’s great – well done! Now all you need to do is grow a pair and lift your Fees to a level where you actually have to compete with other Agents in your patch – rather than taking the current easy route and being the ‘cheap option’ some people will always plump for – and you’ll make some decent money.
Of course, as a result of the fee hike you won’t get anywhere near as many listings as you say you do now – but then you’ll have even more time to post on EYE – so win:win, innit! ;o)
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…and there you have the big misunderstanding…why do I need to raise my fees?…
Average fee of £1500…my cost/fee ratio means I get a better return than most high st agents…just to explain to you because I know you need help in this area…so it costs me very little to run my business so lets say on average I make 300% to 400% profit on every sale agasinst cost….
Thats why my buisness works the clients get a fee which saves them potentially thousands and I get a great return which gives me a comfortably life.
You have an issue with this for some reason….why?
…and no I havent sold 100 so far, I do have 8 months to go thou..
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I need no help whatsoever to understand your business – or any other that runs on the cheap as chips model.
There is a reason why the majority of Agents charge what they do – primarily based upon belief in their value. And it seems that +90% of the public subscribe to that belief also.
You obviously have a belief in your value too. I would say you’re about right – so maybe trying to hike the figure wouldn’t be such a good idea after all.
Just remember than in 10 years, £1500 won’t be worth £1500 in today’s money. And those nice portalpeople will be upping their charges every year… nibbling away at that “300% to 400% profit on every sale against cost”…
I’ll be watching.
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..in 10 years from now I will be 50 and retiring so I don’t need to worry, appreciate your concern thou..:-)
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Your dedication to the industry is duly noted, Sir.
Ten years and you’ll be out of Agency, you say?
Something for us to look forward to, I suppose…
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That’s the plan, keyboard warrior..:-)
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Stick to it.
In fact… bring the plan forward – retire this year.
Tomorrow’s as good a day as any.
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I am getting concerned, are you infatuated with me?….
I would, but I would be bored, 40 is too young, plus I really enjoy what I do.
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The only infatuation there is here to worry about is yours with yourself, Sir.
Shouty egos require high maintenance – take your eye off the ball for a minute and you’ll say something that will bite you on your @rse – and people like me will be watching and waiting for it.
I have no issues whatsoever with successful Estate Agents – in fact they have my permanent admiration… IF their ‘success’ is genuine and fairly obtained.
If you believe you fall into that category then you should have no issues with what I say or do.
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“and people like me will be watching and waiting for it.”
Quite a sad individual, you sound like you would be great fun at a party…
Glad you have no issues with successful estate agents and I accept your admiration of me.
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I will confirm any admiration if and when I believe it due, Sir.
Don’t hold your breath.
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***
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PB are 1/10th the size by market cap than they were at their zenith, regardless of anything in the finer detail it just means that while there’s something in it the method of execution whilst valiant doesn’t work, it will have to change likely by monetizing data with ancillary income as their usp is to be cheap, that’s impersonal and this industry is nothing if not personal, this experience of lockdown has proven it for me, the company ( mine) can still function ( and we’re an established team of friends as much as colleagues/staff 20 years+ ) who are tech savvy in our professional and personal lives but we’re not as good as we were, an office keeps you honest, mutually motivated ( anybody can have a bad day or days ) with collective knowledge in real time, cross pollination of like minds, you can’t replace that.
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Started off with a great idea but used demonstrably untrue claims* and made a catalogue of fundamental mistakes as Harry has identified above. Add to that admitted to multiple breaches of one criminal Law (money laundering regulations), currently under investigation by HMRC, press stories of VERY unhappy LPEs’ and accusations of falsifying and deleting ‘unhelpful’ reviews that just won’t go away*.
Tock follows tick. Tick follows tock.
*Ref: Watchdog, Private Eye, Adrian Goldberg Radio 5 Live, BBC4 Money Program, You and Yours, ASA cases and personal letter from Mr Bruce withdrawing claims of all LPEs’ being “qualified” etc. etc. etc.)
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No tears to shed for these feckin” chancers.
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