One of the earliest entrepreneurs to found a website to allow for-sale-by-owner property listings back in 2000, predicts current online agents must increase their prices if they are to turn a profit.
Nick Marr - who now operates The House Shop, a classified listings service for property, as one of a range of digital projects in his portfolio - founded Homes Go Fast in 2000, which was rebranded as The Little House Company in 2004. More recently this has turned into The House Shop which operates as a listing service for estate agencies and private sellers as well as having a specialist section for disabled-adapted properties.
Interviewed in the Financial Times today, Marr - a police officer in north London when he first created a property website - says that his Little House Company brand “became toxic” after a number of conflicts with traditional estate agencies. But he acknowledges that more recent and heavily-funded online entrants have made considerable impact although he believes there may be a weakness in their business model.
“A lot of these guys are not making any money. How much does it cost to get each customer when you are using TV ads and so on?” he asks in the article.
“They are going to have to put their prices up, and when people pay upfront, if you’re asking for £1,000 or £1,200, they might be uncomfortable with that. I think they are going to struggle.”
The article - which is here but for many readers may be behind a paywall - cites Purplebricks as the most successful of the current online agencies, and refers to easyProperty and eMoov as other onliners with substantial backing. They have persuaded traditional bricks-and-mortar players such as Countrywide and Savills to experiment with online models too, suggests the article.
Adam Day, founder of Hatched - recently purchased by Connells - is quoted as explaining the rise of his online agency. “We picked up a customer in the village of Middle Winterslow outside Salisbury, and then all of a sudden we had three For Sale boards up in Middle Winterslow, and then three more. The business grew by word of mouth” he says.
The article - which is one of a series looking at various forms of entrepreneurship - also cites Mark Readings, co-founder of HouseNetwork, who says steeply rising house prices over the past decade have helped online agencies prosper.
“A house that was worth £100,000 10 or 15 years ago might now be worth £300,000, and estate agents’ fees haven’t moved. That feels like more money for less work,” he says.