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TODAY'S OTHER NEWS

Online firm Housesimple claims it’s second largest agency in part of UK

Online estate agency Housesimple is extending its offer to sell homes for free to some postcodes in the Midlands. 

The offer is now available in 25 postcodes in three different areas of the country and Housesimple claims the initiative has made it “the second largest estate agent in the North of England.”

It also claims to be “a leading agent in Manchester, Liverpool, Leeds and Sheffield.”

Since trialling its free listings service in January, Housesimple says it’s “helped over 5,000 people move hassle-free, saving them an estimated £7m in total fees” and states it’s one of the leading estate agents in Manchester, Liverpool, Leeds and Sheffield.

The latest expansion is into the city of Nottingham where vendors in postcodes NG1 to NG8 - it’s officially launching on December 27. 

The agency says that based on the city’s average property price of £218,078, home owners could save nearly £3,500 in fees - but that assumes the property actually sells and the vendor does not have to use a High Street agent.

Housesimple chief executive Sam Mitchell says: “We are on a mission to change estate agency for the better, by making the experience of buying and selling property simple, transparent and free … Nottingham stands out as having one of the strongest property markets in the UK. The city has seen consistent house price growth in recent years, homes are selling in good time and very close to asking price.”

Under the free deal, sellers still receive valuations, photos and floorplan, ads on Rightmove and Zoopla, a For Sale board, “and the support of a dedicated team at every step from valuation through to completion” which the agency says includes “negotiations and sales progression.”

Rather than charging commission or upfront fees Housesimple earns referral fees from no-obligation services including mortgages, conveyancing and insurance. 

“Looking ahead to the New Year we will be expanding into even more cities and towns across the country” says Mitchell, who over the summer said he wanted the free deal extended across the entire country in around 18 months.

Founded in 2007, Housesimple is backed by investors including Sir Charles Dunstone, together with his business partner, Roger Taylor. 

Its free sale service is available in all or part of the following postcodes:

    1    LA (Lancaster)

    2    BD (Bradford)

    3    HG (Harrogate, Ripon)

    4    YO (York)

    5    PR (Preston)

    6    FY (Blackpool)

    7    BB (Blackburn)

    8    HX (Halifax)

    9    LS (Leeds)

    10    HU (Hull)

    11    DN (Doncaster)

    12    WF (Wakefield)

    13    HD (Huddersfield)

    14    OL (Oldham)

    15    BL (Bury)

    16    WN (Wigan)

    17    L (Liverpool

    18    WA (Warrington)

    19    M (Manchester & Salford)

    20    S (Sheffield)

    21    SK (Stockport)

    22    LN (Lincoln)

    23    NG (Nottingham)

    24    CH (Chester)

    25    CW (Crewe)

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    Great savings, however, how much money is the company making and can it still be described, in pure accountancy terms, as a 'going concern'?

  • Andrew Stanton Proptech Real Estate Influencer - Analyst - CEO Proptech-PR

    I only have sight of accounts to March 2018, which was a long time ago, but at that point, in the previous year they turned over 2.5M and made an operating loss of 13.5M. Or put another way, for every £1 they generated as cash flow it cost them £5.40.

    So, not a model making money. Since June 2019, they are doing the job of selling for free, so that lowers the cash flow coming in, but their pivotal strategy is to make profit by capturing data from buyers and referring people/data to the financial and conveyancing services sector, mortgages, insurances etc.

    What strikes me is that if you are running a company on tech and no physical offices, why is it costing £13.5M to run, and I assume that the cost in 2019 / 2020 will be North of £10M, so will the referral fee income cover that spend and some? I do not think it likely.

    Also, as only 12% of vendors see the fee as a factor when instructing an agent, I do feel that for 78% of vendors charging a fee is no issue - as long as the House Simple proposition is viable and results in good marketing, good service, excellent after sale agreed service and a seamless omni-channel experience for all clients, buyers and sellers.

    If the tech is merely a digitalization of the old model of agency, which is hardly seamless and often has major problems, and if there are not enough humans to hand hold the public - which is a key part of a property professionals core role, then even if you give the public the offering for free they may well vote with their feet and use the local agent with 4-sales people with 30-years experience each, who live in the area, and can give service that has a higher level of value.

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    Their next accounts (to 31st March 2019) are due to be filed by the end of this year. Should make interesting reading.

     
  • Andrew Stanton Proptech Real Estate Influencer - Analyst - CEO Proptech-PR

    Property Pundit, I am getting an Alexa for Christmas so I can get Purple bricks results and also Housesimple, the great missed opportunity, is that tech is for sure coming, but, these lumbering online machines are not thinking straight, much like Countrywide, also a lumbering great machine, both have client and client data coming out of their ears, and if they used it, realised what the clients want or even dare I say predicted it using AI what the client of tomorrow wanted, they could build a real process around it. Instead all cash is being burnt just to keep the lights on.

    My solution would be with so many bright people sitting in proptech labs, mostly clustered around London, a simple call to them for help, might give the C-suite some really good strategies. The solutions are out there, grab them before the quickly dwindling cash in the bank disappears.

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