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TODAY'S OTHER NEWS

Boost for Purplebricks and co as online market share rises

There has been a surprise, but small, increase in the market share of online estate agents according to the latest survey.

Business consultancy TwentyCi says online operators’ market share peaked at 7.9 per cent during the third quarter of this year.

But the consultancy says the long-term average market share remains at 7.0 per cent and this appears to be a ceiling for online firms, which will need “a significant change in marketing” if they are to move closer to a 10 per cent share.

Market share by property price band has been consistent for online agents, with lower priced homes steadily contributing to the sustained online agent growth.  

Consistent to the last quarter, for Q3 year on year, the largest growth in the use of online agents is in Scotland, closely followed by the North East of England. 

This trend reflects the ongoing popularity of online agents with homeowners selling lower-priced properties, typically more of which are found in these areas of the country. 

Online agents have also made significant gains in London and Scotland, potentially given their fixed cost appeal for greater consumer confidence.

TwentyCi notes that onliners are failing to gain traction with property sellers in the South West and the East of England where traditional high street agents have more market share and larger proportions of more premium properties are located.

“Online agents consistently resonate with the lower-value end of the housing market; to achieve significant growth across the market we would anticipate a change in approach from these agents to engage with the broader housing market” explains Colin Bradshaw TwentyCi’s chief customer officer.

TwentyCi’s report on the wider housing market for the third quarter of 2019 shows Brexit’s impact slowing most aspects except for an eight per cent increase in exchanges amongst first time buyers aged 18 to 35.

There were 966,464 homes exchanged in the year to September, showing a 2.2 per cent rise on the previous year, but the snapshot also reveals a decline of new properties coming on the market.

TwentyCi says government proposals to make house sellers pay stamp duty instead of buyers in this quarter may have also contributed to caution in the market.

Q3 saw a total of 1,715,395 new instructions, 212,319 fall throughs and 801,013 withdrawals in the market.

Nationwide there is a clear North-South divide with any growth in average asking prices across the North of the UK and the Midlands, with London and the south showing a small percentage reduction in average asking prices. 

While previous reports showed some growth in average asking prices for properties in the South of the UK, it is likely that homes in this region of the UK have seen average asking prices stabilise following their earlier peak – with the peak of this growth in the North.

  • Chris Arnold

    There's no logical reason for online agency not to have a greater market share, other than that their marketing message doesn't resonate.

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    i think it's the product proposition that doesn't resonate and a failure to deliver to local markets and establish a sustainable proposition

  • Paul Singleton

    Boost for Purplebricks as market share of online rises? The reason that it’s rising is that the poor offering known as House Simple are doing it for free. If we started selling houses for free I’m sure our market share would rise too! Not Rocket Science is it?

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    All eyes on Housesimple's next financial statement.

     
    Paul Barrett

    Well I am just about to put a property on the market.
    Guess what I won't be using a High St EA.
    All I need is a RM or Zoopla listing.
    I can do the rest myself.

     
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    @Paul Barrett - Good luck with that, let us know on here how you're getting on, wont't you?

  • Paul Barrett

    Yep it will be an interesting experience as I have previously used EA.
    As I am in no rush I can afford to play the long game.

    I can at least try the two almost free offers to see what happens..As I only need an online listing which I can achieve for free then I don't see why I won't be able to sell my properties especially as they will be vacant and chain free.
    But as you intimate the proof of the pudding is in the eating.
    I do have a good EA in reserve just in case the property doesn't sell by a simple listing.
    EA offer more than simple listings as they have invariably built up a little black book of potential buyers who they know are serious players.
    It is this knowledge that the online offerings are unable to achieve and so EA have this USP.
    I look upon a free or very cheap listing as a way to attempt price discovery which hopefully will work.
    We shall see!!

  • Andrew Stanton Estate Agency Insights Strategies

    Boost for Purplebricks?

    Let me see, is the online sector thriving? YOPA just lost 30M last year, after raising 16M from its current investors, 6 large online agents have closed or gone into administration in the last 24-months, the largest online rental agency has failed just this week, and one online agent is now doing it for free.

    So, in the short term a few more people will list with an agent who charges zero fees, and others will use Purplebricks.

    But, in the next 12-months, who will have any cash left to continue trading.

    YOPA have burnt through (invested?) over 65M since they started almost 50M in the last 2 years, and Purplebricks are eating through their cash reserve.

    2020 is likely to be the decade of clear vision in more ways than one and the smoke and mirrors that has shrouded the 'disruptors' of estate agency may well fall away. Exposing a landscape of broken investors and disenchanted vendors and buyers, landlords and tenants. We shall see.

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