A warning has been issued by a prominent industry figure that more bricks-and-mortar High Street agents will go under in 2020, despite a likely recovery in the mainstream housing market as the Brexit uncertainty subsides.
The warning comes from David Alexander, who established a family-run property management business 37 years ago and is now joint managing director of Apropos - a digital platform launching this year.
He says: “I believe that the coming year will continue to see the transformation of the estate and letting agency market as the business continues to move online with local support through the development of hybrid partnerships. Therefore, there will continue to be more High Street casualties as the bricks and mortar approach diminishes due to high costs and changing social patterns.”
Alexander says this churn will continue apace despite increasing confidence in the market.
While there remains considerable uncertainty about the UK’s future trade relationship with the EU, the General Election has prompted what he describes as “growth among individuals and investors buying properties both for homes to live in and among the private rented sector.”
His firms analysis of house prices since the June 2016 Brexit referendum shows that house price growth halved in the 40 months since the vote compared to the 40 months prior to the vote.
“Clarity and certainty are essential components of the property market and everyone, from someone moving to a larger home, to major investors has been rattled by the Brexit drama and its apparent open-endedness. Of course, while there remain enormous challenges ahead and serious questions about the future trading relationship the UK has with the rest of the EU, there is a feeling that the process has been unblocked and that planning for the next five to 10 years can go ahead” he adds.
“The underlying conditions for increased house price growth are in place with the UK population predicted to grow by over 300,000 per annum for the next 20 years which means demand will remain high” notes Alexander, who believes the north of England may well see the strongest price growth if the government’s pledges to improve infrastructure come to fruition.
“The detail contained within the forthcoming Budget will be a strong indicator of which direction this government is taking on fulfilling its electoral promises in the north of England and the consequent impact on the housing sector” says Alexander.
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What a load of rubbish and pure self promotion. How many on line agents are there now. Oh I think may just set one up today and say I’m the best. When will these people ever learn, never, as egos are way too big!
Have you ever seen a supposed independent article with comment by anyone that is not a plug for their own position or business? It is all a bit one dimensional, there is stacks of it on facebook/linkedin. "John Doe says agents must get to grips with X, which is really hard, scary and difficult, but if they dont do it they will all perish in hell, 4 horsemen etc." The article/post ends with John conveniently turning out to be the chief exec of a business that can save them from this plight if they all buy his product. In this case a bit of a recruitment drive, which is taking its time. Their imminent launch was about 2 years ago, and its still imminent.
However, there are still a significant number of very profitable estate agents trading on the 'high street', the majority of whom are continuing to invest in this model, and even opening new offices.
Absolute rubbish. I can say no more.
I think the regional branch idea really works a hub with an admin and a contract chaser and a place to meet clients. The high street is not dead it’s just changing people are happy buying online but like the option to be able to pop in and see a real person. I’ve been back in a high street branch for a few months and only a few people pop into branch to register and look for details. Most of the people I see are just collecting a free newspaper.
I used to oversee a branch in SW17 and for the 1st period I sat observing the staff to get the feel for the place. An elderly man came in with a Tesco bag each week and head bowed collected a couple of local papers, put them in the bag and left. The staff didn't interact with him. Got me thinking. The following week he came in and I opened the door for him and got chatting. He was from the local mosque and the paper was never delivered there. He was taking copies in for his congregation. From that week on I had a batch of papers ready for him in a branded bag and an invite to a free valuation in (as I recall) Arabic and English attached to the inside. Business increased by over 100% the following year.
@ Online Agent: 'Most of the people I see are just collecting a free newspaper', do you interact with these people at all?
'a prominent industry figure', you're joking, right?
Humberts did extremely well with their hub model!
My last two property sales and purchase wre conducted entirely online and by phone, with just one trip to my solicitors. Do people still frequent high street agencies?
Yes, to the degree that 95% of all residential transactions are still transacted by High Street agencies.
You missed my point Mr Pundit. All my business with the agency was online, via email and possibly one phone call. For all I cared, the office could have been in a high rent/rates High St. or on a web server in Outer Mongolia. Which do you think would be cheaper to set up and run?
I don't think any agency will ever get a real foothold in an area in order to compete with local well known estate agents by having a purely online presence, it's never happened yet. The large corporates that manage to become well known do so by raising investment to finance huge marketing campaigns - it's quite telling that none of them have made a penny profit yet... the high street agent has to make use of online facilities for sure but they will never be replaced by a faceless online office, in Outer Mongolia or South London.
We've increased our sales by double in 2019 as most of our clients realize you get what you pay for and that the online BS ones are basically selling rightmove advertising space. People still like to deal with people face to face and as the population ages, the market for good high street agents will probably increase.
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