The market share for all online agents fell sharply in the period up to the start of the pandemic according to new research - with Purplebricks a big loser.
The data comes from the agency comparison service GetAgent, compiled from an analysis of major portals cross-referenced with Land Registry and other information.
GetAgent says the total share of all online agencies dropped from a peak of 6.35 per cent in September 2018 to just 4.8 per cent in February 2020 - the last representative market period before the Coronavirus pandemic.
Purplebricks remains the dominant online player but has suffered badly according to the analysis.
Its monthly listings, which peaked over two years ago at 6,358 in April 2018, now runs at 4,400 a month on average during January and February 2020.
Purplebricks’ market share peaked at 4.25 per cent in August 2019 but was only 3.45 per cent in January and February this year.
The comparison site says its analysis of Purplebricks’ listings in the 2019 calendar year suggests the agency will see a reduction in revenue of some £7.18m compared to 2018.
GetAgent calculates this revenue reduction based on an average fee to Purplebricks of £1,100; in 2018 Purplebricks had 65,279 listings against only 58,162 last year.
And GetAgent warns that the 2019 monthly average for Purplebricks - some 4,846 properties - was not matched in the two months of 2020 before the pandemic hit. In January and February this year Purplebricks had an average 4,400 listings per month.
Looking at the wider market for all online agents, the comparison site says there were 17,286 fewer listings in 2019 than in 2018.
It says Yopa listings were down 21 per cent year-on-year and its market share dipped from 0.65 per cent to 0.61 per cent.
HouseSimple, by contrast, was up a huge 156 per cent year-on-year and its market share rose from 0.21 per cent to 0.61 per cent. “However, this increase is at the expense of actual revenue given that they became a free service in 2019” notes the report from GetAgent.
“Estate agency as a whole has never been short of its critics but this criticism certainly seems to have shifted towards online and hybrid agents over the last few years” says Colby Short, founder of GetAgent.
“This is always going to happen as an industry evolves and there is no doubting that the online model provides a very cost-effective method of transacting when compared to the traditional agent” he adds.
“However, this more DIY approach to selling does have its pitfalls. Many customers feel as though they’ve been left a little high and dry when it comes to the completion of a sale and that they didn’t achieve the price they would have otherwise.
“This seems to have had a knock-on effect on the popularity of online agents with even the industry leader, Purplebricks, seeing a steady decline in business.
“With yet more uncertainty now shrouding the market, it’s likely that many home sellers will value the professionalism, service and accountability that comes with a traditional agent and the online market share will continue to suffer as a result.”
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Got to wonder how Housesimple are still managing to trade with a 'free' service.
The one thing that you will see from the lockdown is that the High Street no longer exists all agents will become a hybrid mix of some sort. Corporates will come out of this worst as they have properties just sitting on the market not having enquiries answered, virtual viewings that have no follow up in place. the big losers will be Countrywide, Foxtons LSL not the likes of PB who have the ability to still interact with buyers and renters in the current market. The post lockdown will also make it harder for the corperates as they will lose furlough but wont have income coming in for at least the first month and will only have half the staff in the branch due to restrictions on staffing levels
Good luck with that.
Nonsense. How do "PB have the ability to still interact with buyers and renters in the current market" in a manner that I cannot? I assume we work on the basis every agent in the country has a phone and internet connection. I can do everything PB do from my desk at home as normal thanks.
I agree with you 100% Kevin. At least agents have a 2 pronged approach. PB only have one and their financial structure was seriously undermined even "before" the lockdown. Oh the commisery!
They have the ability but they are not, Im from Sutton Coldfield originally over there a letting agent part of countrywide, has properties on the market they are not replying to vendors or proposed renters and are not running searches or getting contracts drawn up as they have Furloughed all the staff. Worst than that another agent has uploaded virtual viewings for every single property but if you send a viewing request you get an auto email saying that they are closed till corona is over and are not manning emails
You can't
It just goes to show in a market where online-only should be doing well they are struggling, as their business model is flawed as property is not simply a transaction between buyer and seller - there are too many other moving parts.
We are ALL online agents as that's where we mainly advertise. We are in regular contact with buyers and sellers as we can work remotely - anyone who can't do this shouldn't be in business. Proper Estate Agents will come out of this stronger than ever - especially ones who have decent rental portfolios. Sales only and online-only agents are at the highest risk.
I agree Phil. As commented above, at least high street agents have the best of both worlds now and a greater advantage than companies like PB who were already shaking pre Covid19.
PB still putting a decent number on, hard to believe that people would cough up their grand in current market conditions. Clearly they are.
You don't know what you're talking about.
Just a question for HouseSimple listers, do you feel proud of yourself when you gain an instruction for free? Do you feel that they chose you because of your sales ability? Secondly how do you feel when they don’t choose you, bearing in mind you are offering to do it for totally free? It must be totally demoralising when the vendor chooses a different agent to you and you are FREE! How do you cope with that?
Not as demoralising as you must feel looking in the mirror every morning. Do you feel proud when you con a 2% fee from a vulnerable old couple but drop your pants for 0.75% from the customer that stands up for themselves? Advertise your fee, deliver the promises you make and negotiate with buyers, not your vendors.
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