A debate discussing how online and traditional estate agency would develop in the future, organised by City investment consultancy Jefferies, has agreed that the future is a work in progress - but both 'sides' of the argument are converging.
Jefferies' Home Truths debate, held yesterday in London's Savoy hotel, was addressed by a range of industry figures including Countrywide's head of retail Sam Tyrer, eMoov chief executive Russell Quirk, UPad founder James Davies, as well as Mark Goddard, head of property services at Zoopla Property Group.
Despite the potential for controversy - and a rumour amongst those in the hall that one person was denied entry at the request of Countrywide for fear this may turn the event into a discussion on the troubled agency group - the debate was civilised and well-informed according to Jefferies.
Overnight the consultancy has itself issued its investor clients with a summary of what went on. It's not a who-said-what-and-how description but a wrap of the key issues coming out of the discussion.
Here is a selection of outcomes as noted by Jefferies' respected analyst Anthony Codling, who in the note to investors stresses that these are his views of the event in total, rather than views held by the individual participants.
1 "Customers trump bricks and clicks There was agreement in the room that the future structure of the UK residential services industry will be customer, rather than technology led. In many other consumer facing sectors, a digital channel is not a nice to have, but a must have. In order to succeed we believe that agents will need to have lines of communication open outside of the old school 'nine to five'. Consumers also want to choose which channels of communication they use and transact through, those that offer the fewest channels are likely to attract the fewest customers.
2. "People, people, people, rather than location, location, location The larger on-line estate agents have moved from a purely on-line model to a hybrid model where trained staff are a key part of the offering. There was broad agreement that a listing on a property portal is unlikely to lead to a sale of your home on its own.
3. "Prices still being discovered It was interesting to note that the hybrids have all been raising fees over the last two years, suggesting that the headline grabbing low fees may well be unsustainable and over time will be less of a differentiator. Low fees are nothing new in the industry, many traditional agents have launched with low fees, but we cannot think of one which has successfully changed the mold. The fact that hybrid fees are increasing, in our view demonstrates that consumers are willing to pay for customer service when they fully understand what they are paying for. We believe that there will be less fee pressure for estate agents of all types who can clearly communicate their service proposition - in this regard a certain high profile London based agent comes to mind.
4. "The times are changing, but slowly In a market where average tenancies are lengthening and households are moving less frequently it will take time for new models to gain traction outside of the innovators (and then we need to wait for them to actually move home) and early adopters, which account for around 16 per cent of the market, the early majority, late majority and laggards will take longer to embrace change.
5. "We are still in the digital foothills rather than fully in the clouds Once again we sensed broad agreement across the panel that many aspects of residential sales are yet to be digitized, such as conveyancing, and a more scientific approach of matching buyers with sellers.
6. "Lettings as yet an untapped opportunity Hybrids have focused on home sales rather than lettings. If you are seeking to capture the fully managed end of the market, lettings is hard; however, we estimate that only around 30 per cent of landlords use a fully managed service. We see a huge opportunity at the other end of the market with those purely looking for help finding tenants."
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It sounds like many of the observations are missing front line agency understanding.
The game has and will always be a people's game. Sadly tech is still driving much of what agents do. Rather than tech supporting more the flow of what agents do and could be doing.
How many have systems that don't do as they'd really like to do in running their estate agency?
If so agency is compromising best performances
All seems fairly reasonable - and obvious. Hybrid, which most agents seem to be already anyway, is where the future is at.
The whole enemy thing has always been blown out of proportion by the media and certain indiscreet industry figures. In reality, purely online agents make up a very small percentage of the market, but nearly all estate agents now have considerable online presences - with websites, social media and listings on the portals. In some cases, they even offer things like virtual reality tours, online valuation tools and digital floor plans. Truth is, to survive in this day and age, you need to be internet-savvy and up to date from a digital point of view. Estate agents understand that better than anyone. Those who don't are doomed to failure.
Which means that most agents are effectively a hybrid anyway. The problem is, certain high street agents get very defensive when it's suggested that their fees are too high and their service is no better than the online offerings. It's why we see regular disdainful comments about online agents below article.
But, in reality, the best agencies mix the best bits from the two models. Hybrid - or whatever you want to call it - is already the dominant force at the moment, and will continue to be.
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