There’s no denying it: gone are the days when buying and selling houses was strictly an offline process. Like so many aspect of our lives, real estate is going digital, and online estate agents are taking an ever-increasing market share away from their bricks-and-mortar counterparts.
The strongest disruptor to the traditional agencies is Purplebricks, founded in 2012 by brothers Michael and Kenny Bruce after selling their 16-branch Midlands estate agent Burchell Edwards to Connells. Billed as the “world’s first 24 hour estate agent”, and promising to combine cutting edge technology with local property expertise, Purplebricks launched on the London Stock Exchange in December 2015 with a valuation of £240 million, giving it a 60% share among the top six online estate agents.
The affect of Purplebricks — which offers homeowners a low fixed-fee and money-saving smart technology — on the UK’s estate agency groups is clear. The largest of these, Countrywide, has seen its stock price fall over 50% over the past 12 months, losing hundreds of million of pounds in value, and the revenues and profits of other big players in the real estate market have also been hit hard.
Countrywide launched its own online service in 2016, which is currently being rolled out across its nationwide network. Time well tell if others will follow suit, keen to lure customers being enticed by the likes of Purplebricks.
While high street estate agents remain the top choice for many homeowners, online agents continue to benefit from positive media portrayal, such as the BBC’s One Show’s 2016 segment portraying online agents as the future of estate agents.
In the show, a woman selling her house through an online estate agent helped potential buyers view her property, giving her local knowledge and wisdom on the property and local area. Next, they had a seasoned High Street estate agent show the same people around the same property providing his own in-depth knowledge and expertise.
In the end, the show asked five potential buyers to choose which estate agent provided them the best service by making it a straight-forward choice between a personal viewing and an assisted viewing. The online agent came out on top, with four votes to one.
“Online estate agents are not trying to make a quick buck by offering a budget service,” says Ashton Lloyd, Scotland’s biggest online estate agency. “We offer a quality service because we know that it doesn’t have to be so expensive. With High Street agents charging up to 1.5% + VAT to sell your property, you could be looking at paying upwards of £2000 to sell an average 3-bedroom house in Scotland. With Ashton Lloyd, the price is £695 regardless of your property because we know that marketing a property for sale through online channels (where 95% of property searches start) is not nearly as expensive as the High Street estate agents want you to believe. That £695 gets you professional photography, floor-plans, a for-sale sign and everything else that the High Street offers.”