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TODAY'S OTHER NEWS

Online agency alleged to have told staff they may not be paid

House Network, one of the first ever online estate agencies, is alleged to be considering calling in administrators.

Two reliable sources close to the company have informed Estate Agent Today that staff were told on Thursday that they may not be paid in the immediate future.

Mark Readings, founder and managing director of House Network, is reported to have disposed of some of his holdings in the company in order to pay staff in recent weeks. 

House Network was set up in 2003 by Readings and Graham Lock – the latter is no longer with the agency and is now setting up the Federation of Independent Agents.

When customers contacted the agency on Thursday afternoon they were told that the company was still in business and those who emailed the agency received the usual automatically generated reply saying their enquiry had been lodged on the system.

EAT has contacted the agency asking for a formal statement on its position; there has been no response to date.

It has been a torrid time for online agents in recent months.

Emoov and Tepilo have entered into administration (the former being resuscitated under new ownership); Hatched was closed down by Connells, which said a hybrid/online service was not viable; last month Purplebricks issued a profits warning. 

Meanwhile another survey has shown that online agents’ market share is slightly down - although this latest snapshot is some months old.

Data from consultancy Twenty Ci, just published, reveals that in the third quarter of 2018 about 20,000 properties exchanged while listed with onliners.

This was an increase of almost 5,000 over the previous three months but this growth was down to a busier market, not increasing share.

In fact online agencies’ share dipped to 7.2 per cent, down from 7.6 per cent earlier in 2018.

More recent data from another consultancy, The Advisory, shows the top 10 online agents’ market share at about 5.0 per cent.

  • Kristjan Byfield

    Yowser another onliner with millions of losses (Dec filing shows losses of £8.6m)- interesting to see a 'mature' onliner show that even after 16 years of building the business there is still no route to profitability/viability- in fact losses just seem to scale with operations. Looking at the CH accounts filed for almost any online-only operation makes for some pretty eye-watering reading. Feel sorry for the staff that are probably the most impacted, followed by the clients that pay upfront (if the business shuts) but surely serious questions now have to be asked by financiers and clients alike as to whether this model can work in the UK with the lowest % of global estate agency fees, a high cost of customer acquisition (both vendors and landlords) and an increasingly complex legislative landscape in lettings & management.

  • Babonday Brian

    no doubt about it. the tide has gone out on fake hedge funded onliners.

    Bricks only going for same reasons. Spending £1000 on adword to get £800 fee and then customer having to pay a real estate agent to sell it 6 months later.... Which? are to blame..asleep at the wheel on this PAYANYWAY model.

    Biss Boff Bonliners

  • Paul Barrett

    Well I will be using the cheap online EA and probably fb etc.
    No way will I be paying any form of commission based on the sale price of my property.
    The main problem is that there are insufficient sales to retain the EA industry in it's current form.
    Substantial consolidation of all types of EA and LA is required.
    The industry by necessity needs to be far smaller.
    The days of lits of sales generating vast commissions are long gone never to return.
    Selling property dies not require commission to be paid.
    EA are just car dealers selling properties.
    No commission needed.
    Just a straight forward one of low fee.
    All that is needed is to get the property on RM or Zoopla.
    The homeselker can achieve that for £99.
    I have sold numerous cars and bikes.
    I am perfectly capable of selling my properties with just a very cheap listing fee being paid.
    Many sellers think like me.
    The old EA model is broken.
    Paying commission is something that sellers simply aren't prepared to pay anymore

  • icon

    Yup.
    You are.
    But at what price.
    Go ahead mate it's not a bike it's your main asset.
    Love these people because they always loose thousands for a fee ???????????????

  • Paul Barrett

    Commision doesn't generate a price.
    The price is what it is.
    Just because the seller might attain a commission doesn't increase the price.
    I will sell my own properties without any outside assistance being required.
    That is what the internet has done to the traditional ways of doing things.
    It is just a reality
    Property is just another commodity that does not require commission based sales people to achieve best market price.
    I'm sure I will sell for roughly what I want when I want it.
    There isn't a lot of stock out there currently so when mine go to market there will be far more desperate buyers than desperate sellers.
    Happy days!!

  • icon

    Good luck.
    Haha haha.

  • icon

    Paul.
    Time to go to bed.
    Get off this site.
    It's for Profesionals.

  • Andrew  Estate Agent

    Quote from Gosling CEO of House Network - in 2017

    “As more people feel comfortable with the online model, we expect online agents to grab a bigger slice of the UK estate agency market. Currently, online estate agents have around 5% market share. We believe this will increase to 15%–20% by 2020,”

    In 2016, the business received £13m of investment from Carphone Warehouse founder, Sir Charles Dunstone.

    The Reality in 2019

    So far this year - online agengies are only 5.2% of all new listings, with many big online brands going South since last September, together with 10's of millions of institutional investors / private investors money. The ever growing list includes, Tepilo, Hatched, Emoov - though son of Emoov has been born and now probably House simple.

    Unfortunately there will be more to follow, Doorsteps at £99 an instruction are looking vulnerable- they will need to crowdfund again soon to bail them out, but this time I think that the investors at crowdcube will think 800k invested, zero profit … time to keep my money in my pocket especially with the winds of Brexit upon us.





    Of course there is still PB - yet to make a penny profit.


    But the good times - well average times, judging by share price may be at an end, especially as all agents are about to come under scrutiny due to the new Trading standards for estate agents, calling for transparency over fees.


    No longer will PB be able to say no commission, or commissary when they have to explain the 25% referral fee that every self employed Local Property Expert trousers per pay upfront instruction.

    I foresee cash flow drying up when prospective vendors are made aware, sale or no sale, the person in front of them is about to get an instant £250 just for listing their home. Now that is misery, cake in the face anybody?

    Reconfigure My Home

    Err wrong again Andrew, Charles Dunstone has shares in House simple not House Network

     
  • Reconfigure My Home

    Andrew I wouldn't be happy if I were Housesimple with you referring that they are about to go bust as you have referred as the article. Graham
    Norwood story relates to House Network... small errors can be costly

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