There has been a muted response from the City to the announcement just before the weekend that high-end estate agency Savills is investing in hybrid estate agency YOPA.
On Friday, Savills' chief executive Jeremy Helsby announced that by putting an unspecified investment into YOPA - a hybrid agency operating chiefly online - the move was "enabling us to take an interest in the high volume segment of the market, comprising over one million transactions annually, to which Savills has had little exposure to date."
In the past some senior Savills executives have been openly hostile to anything looking like an online estate agency. YOPA is a variation on this theme, offering expertise of a dedicated local estate agent to guide vendors through a sale, combined with what it describes as the cost-saving efficiency of an online service.
Savills' share price ended Friday down 5.0, or 0.64 per cent, at 780.0.
“We have been consistently impressed by YOPA, whose technological edge, dedication to service, clarity and focus on the client at the heart of the sales process all resonate strongly with our core values and the way we do business” says Helsby.
Savills' investment, expressed through its proprietary arm called Grosvenor Hill Ventures, is part of £16m raised by YOPA in its last funding round.
Savills has not revealed the size of its investment; over the weekend a senior Savills agent told Estate Agent Today that "an investment of a few million is a risk it can easily afford to take." The company saw revenue rise 19 per cent to £1.28 billion in 2015, while pre-tax profit was 16 per cent higher at £98.6m.
Other investors in YOPA include relatives of the Barclay brothers, owners of the Daily Telegraph; the newspaper has described the move over the weekend as Savills "squaring up to Purplebricks", the agency widely seen as the market-leading online firm.
YOPA claims that since relaunching nationwide in January, its listing numbers have on average more than doubled month on month. It enables people to sell their property for a fixed fee of £780.
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Yeah right. I am still waiting for an online agency to actually break even. Fees will have to be increased to do so.
Online, in some shape or form, will be the way forward. That's just the way the world is going. Look at Savills, look at Countrywide, look at Foxtons - all diversifying their business to include an online arm, or at the very least moving further and further into hybrid territory.
There seems to be lots of debate about the success or otherwise of Purplebricks, Tepilo, eMoov and HouseSimple, but online agents aren't going away anytime soon. We can argue until the cows come home about the online model, but there is a place for it. People do use them. They wouldn't still be around if that wasn't the case.
Look at some of the most successful companies in recent years - Rightmove, Uber, Airbnb, Match.com, Just Eat, Facebook, Twitter, Instagram, Amazon. What do they all have in common?
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