Sellers are set to become more selective about their estate agent this year, which could hit online brands such as Purplebricks, a prominent property analyst has warned.
Research firm Davy claims Purplebrick has lost around 40% of its market share over the past three years.
Across 2019 there was a stable backdrop for the online agent, with market share drifting from 4.1% in January 2019 to 3.9% in December, according to Davy.
Its market share dropped to 3.6% and to 3% by the end of 2021, the analysis found.
Last year, Davy said, Purplebricks’ market share bounced back to 3.2% in the first quarter but ended the year at 2.5%.
Using TwentyCi data, Davy also reported that the UK housing market delivered 289,635 new instructions during the final three months of 2022, up 8% annually but down 28% compared with the previous quarter.
Purplebricks saw new instructions fall 12% annually to 7,156, Davy said.
David Reynolds, analyst at Davy said the quarterly decrease is normal for the season, adding: “House supply is relatively steady, but November’s data show mortgage approvals 31% below their ten-year-average.
“Agency trade body Propertymark thinks we are entering a ‘buyer’s market’. You would expect sellers to be more selective of their agents, perhaps this will be a difficult time for the online agents.”
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With less overheads decent online agents will be fine, I would be worried being a High Street agent with the costs of running when nothing is selling.
No surprises there. The cat is out of the bag. If you pay peanuts you get monkeys. Sellers want to know they are dealing with established agents who provide a service and are available for them. Plus paying up front for a service that may not occur?
Has the USP of an online agent diluted now since many traditional agents are "online" also. Would a client looking to buy consider who is online or not?
Until online agencies figure out the compelling reason to use their services, they won't make discernible inroads. Cheaper doesn't cut the mustard. Nor brand awareness.
So what's the message!
It would be good to know what is meant exactly by selective and how a correlation between whatever the selective criteria are and the bearing this has on a seller choosing or not choosing an online agent. And building on Stuart Forsdike's above comment, what is the definition of online in the property environment?
Also, the data comparison doesn't match:
"Using TwentyCi data, Davy also reported that the UK housing market delivered 289,635 new instructions during the final three months of 2022, up 8% annually but down 28% compared with the previous quarter.
Purplebricks saw new instructions fall 12% annually to 7,156, Davy said."
The figure that's missing is PurpleBrick's last quarter comparison rather than only quoting the more detrimental annual one.
This is a great example of somebody being selective with the data. They've decided the outcome they want to prove, "...sellers are set to become more selective about their estate agent this year..." and then engineered the data accordingly. Rather than laying out all the data, demonstrating a methodology and then drawing an objective (not subjective) conclusion.
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