Savills has declined to comment on whether it will follow in the footsteps of LSL Property Services and write down its investment in Yopa.
Earlier this week LSL - which has a 14.7 per cent minority shareholding in Yopa - downgraded the value of that investment from £20m to £7.8m as at December 31 last year.
It added that: “We continue to believe that traditional estate agents will represent the substantial majority of the residential sales and lettings markets for the foreseeable future and that estate agency branches will continue to remain core to providing the service our customers expect.”
Savills reveals its preliminary full-year figures for 2018 next week; it was in LSL’s preliminary figures a few days ago that its writedown was revealed.
Savills is regarded as a significant investor in Yopa although its precise stake is not known. In June 2016 Savills was named as one of the investors in a £16m package of funding for Yopa; the investment came from Grosvenor Hill Ventures, the proprietary investment arm of Savills plc.
At the time a Savills statement said: “We have followed the rapid advance of the online ‘hybrid’ estate agency model over the last year … 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.”
In May 2017 there was another £15m package of investment in Yopa; this was led by the Daily Mail and General Trust but was known to include some money from Savills’ Grosvenor Hill Ventures as well as private investors.
LSL’s initial £20m investment came in later - in September 2017. Then in August last year, 2018, Yopa received yet another £20m in funding with Savills reported to have been the leading player.
A year ago another trade publication, The Negotiator, reported that Savills claimed Yopa was the 10th largest estate agency in Britain based on new listings rather than existing listings, branches or employees: the comparison was made by brand, rather the companies.
Now Savills has told Estate Agent Today that it has no comment to make on the LSL writedown; Yopa has not responded to a request for comment.
Savills’ trading figures will be revealed to shareholders and the City next Thursday, March 14.
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I think Savills always saw YOPA as a punt, rather than the future of agency, otherwise Savills would have tried the Countrywide conversion scheme mooted by Alison Platt, wisely it has stuck to high value for money service.
But clearly, if they write down the value of YOPA or not, the value of online only agents is falling in more ways than one, both share price - see Purplebricks, and confidence in the model. In a tight market vendors like the comfort of a proven marketing model, and traditional agents are just that.
Agency, sales and lettings is changing, following Fintech, multi-millions are now being poured into Proptech, and possibly in the next five years the new model of agency will come into being. But, the online model of a Local Property Expert covering multiple roles, lister, negotiator, etc just does not work.
Agency is a people business with essentially a seller, an agent and a buyer (I know we know this) so the challenge is how does an agent do everything to get sellers comfortable in selling and buyers keen to buy - in all market conditions. Technology can help a lot here but not in the way many have applied it so far
Lsl and savilles should be banned from trading for backing a pay any way model. They can't have any 'core values ' to back it in first place.
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