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TODAY'S OTHER NEWS

Online firms ‘have forced other agents to be more competitive on fees’

An estate agency comparison website claims the rise of online and hybrid estate agencies has obliged traditional agents to be more competitive with their fee structure and to concentrate further on customer service.

NetAnAgent allows would-be sellers to receive what it calls ‘instant quotes’ from a range of agents, some of which then submit more detailed proposals within the following 48 hours.

The site’s chief executive, Alex Thorpe, has now issued a statement following last week’s shock announcement by Connells that its online agency service - Hatched - was closing to new business with immediate effect. 

"We have worked with Hatched since 2015 and are sorry to see their business close” he says, before coming to the crux of his claim. 

“As the industry landscape has stabilised since the launch of various online and hybrid services, traditional agents have responded with both more competitive fees and a focus on service” he says.

Thorpe then continues” “Our data shows the gap has narrowed between online/hybrid agents fees and their local counterparts as they have found their place in the market to exist alongside each other.”

He then suggests Connells had invested in Hatched - which it owned since 2015 - as a fall-back plan if online went on to closely rival or even displace traditional agency for business volumes. He says: “It appears the well-performing Connells Group has concluded that their [sic] future is secure and it no longer needed Hatched as an expensive insurance plan." 

The fall-out over the closure - arguably the first significant backwards movement for online estate agency in the UK - has continued over the weekend.

Anthony Codling - equity analyst at City consultancy Jefferies and a long-time critic of some online players - used the Hatched move to have a swipe at Purplebricks, which switched away from its traditional upfront payment model in Australia last week. 

“If it doesn't work as well as planned in Australia, can we be sure it will work in the US and the UK?” Codling asks in a note to investors.

A statement from another online firm HouseSimple picked up the point made by Connells - which as a result of Countrywide’s haemorrhaging market share is now the UK’s largest agency - that “an upfront fee obligation, payable irrespective of whether a property sells or not, is not the right solution for the customer.”

HouseSimple’s chief executive Sam Mitchell told Estate Agent Today in a statement: "Whilst we don't agree with most of [Connells’] views on the hybrid model, we do agree when it comes to upfront fees. That's why earlier this year Housesimple became the only online estate agent to adopt a No Sale No Fee only model.”

Poll: Have online agents forced traditional ones to cut fees?

PLACE YOUR VOTE BELOW

  • icon

    why would anyone charge a fee that ultimately losses you money-whats the point.

  • Chris Arnold

    Dont wrestle in the mud with pigs.
    Any agency that decides to lower fees in order to 'compete' with online/hybrid's, hasn't enough credibility in the first place. Apple doesn't reduce the iPhone because of competition. It tries to get better and stay different.

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