You saw it, right? This article from Monday’s Guardian? It says that one in five estate agents are at risk of going out of business because of online competition. Now, I’m not one to get worked up, one cannot lose their temper if they wish to master the Rubik's Cube, but it’s this kind of half-baked and presumptuous journalism from big, national press associations that throws negative light on PropTech and suggests that high street agents are helpless against the tsunami of technology.
It is, and please forgive my French, complete and utter rubbish.
There is no doubt that online agency is having an impact on the market share of the property industry. High street agents are facing increased competition for listing, marketing and, ultimately, closing deals. But headlines like ‘One in five high-street estate agents risk going bust’ paint with such broad strokes that, in my opinion, they do as much, if not more, damage to the high street industry as the tech they’re reporting on supposedly does.
(Before moving on, it is important to note that the Guardian article uses a study by accounting firm, Moore Stephens, as its source.)
There are a couple of reasons why this sort of statement making from the Guardian is incredibly unhelpful;
Firstly, it adds unnecessary fuel to the fire that burns between some property traditionalists and their digital counterparts. I have no doubt whatsoever that the future success of property is dependent on collaboration between tradition and tech. When articles like this are read and shared thousands of times, we can’t be naive enough to think they don’t take effect on at least some of the readers.
Secondly, it assumes that agents are helpless and weak, killing time before time kills them; outpaced, outskilled and undercut by the internet. How is that not offensive, to be labelled as increasingly redundant? It demonstrates a striking lack of knowledge about our industry; ignoring, among many things, the fact that, when it comes to property, people still want to deal with people.
Agents are not doomed, they are under pressure. However, the skills and knowledge that they have cannot be replaced by online. We shouldn’t encourage messages of doom when far more benefit comes from being evangelical about collaboration, re-alignment and the standards to which we all hold ourselves.
In this age of Digital Transformation, we owe it to ourselves to change and reflect on our business models in order to safeguard our future. But in the years that have passed since I was an agent, the driving desire to ensure we continue providing the great service we always have has not diminished. We do, however, have to realise that our roles are changing. In some cases, the change will be radical.
The fact of the matter is that ‘change’ is simply evolution. As property professionals, we will evolve and adapt, coming out stronger and more nimble than before.
To all of us who read stories like this, I implore we not accept the predictions as gospel and lose hope in our industry’s future. For every story of profit loss, there is another of growth. For every story of failure, there is another of success. And while the drop in Foxtons and Countrywide’s pre-tax profit is profound, LSL’s boost of 61% in the same period shows that the story is not that simple. LSL released a statement saying they have faith in the high street, which will continue to generate a “substantial majority of the sales market” until 2025. However, they also pledge to continue exploring digital opportunities.
We do not live and die as a whole; each of us makes our own decision about how to move forward. I only wish there was more broadsheet coverage of technology’s many gifts to property, and I mean something more than a listicle entitled ‘5 crazy IoT devices for the home’. At the time of writing this, the Guardian, who published stories for both Foxtons and Countrywide losses, are yet to write on LSL’s growth. Instead, they’ve opted for a story entitled ‘Britain’s corrupt housing market needs more than a lick of paint’.
Maybe I’ve been spending too much time with my kids out here in Italy; maybe their youthful tenacity is rubbing off on me. If so, I’m OK with that because half-truths aggravate me. For example, the data that is quoted in the article is based purely on the retail sector. I would argue that declining demand for retail space has little to do with online agency, it is a result of the world’s wider Digital Transformation which, in terms of retail, started with Amazon, not Zoopla. To quote such figures in the context of an article about online agency demonstrates an important misinterpretation of the data.
One only has to look at the world around us for guidance. Property is by no means as important an issue as immigration or social equality, but the overriding emotions need to be very much the same; we should be spreading a message of hope, not doom, acting out of opportunity, not fear. We are in the midst of political and economic uncertainty unseen for a generation, for the nation’s most valuable asset class to neither falter nor trip would be quite extraordinary. We live and we learn and we adapt.
Broad strokes of negativity help no-one. And suggestions of high street helplessness are completely uninformed. The Guardian article suggests that agents are being ‘undermined’; I think underestimated would be a more accurate choice of words.
I’d like to end this article with a few quotes, taken from comments made on a LinkedIn post about one in five agents going bust:
“One has to question the quality of the Moore Stephens article as it also refers to a growth in market share for the big agents like Countrywide which has perfectly obviously LOST around 50% of market share in past 5 years...perhaps Moore Stephens should stick to audit.
“However, the belief held by an astonishing number of agents that the only way to maintain or grow is to cut fees lower and lower is truly astonishing and will surely lead to financial pain.”
Harry Hill, Director of Digital Reality Corp Ltd (and former Countrywide boss)
“Roll up your sleeves, offer a decent service, like any other business.
“Without overstating the obvious, sell a property at a fair commision with good customer service. It doesn’t get much more straightforward than that…it’s never a fee issue, it’s a belief issue.”
Julian Sonnessa, Head of Investor Relations at Wakely Residential Investments