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By Graham Norwood

Editor, EAT and LAT

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Emoov’s humiliation - the fallout for the industry

Whatever one thinks about online estate agencies, it’s a cause of genuine sadness when people lose their jobs - close proximity to Christmas makes this bad news even worse. 

The sympathy deserved by Emoov’s workforce, or those still there by the end of its theatrically-long death throes, was lost a little in the noise of the past week. 

Much of that noise, deserved or not, was widespread industry gloating (including by rival online operators) over the downfall of Emoov’s chief executive. 

We’ve all got a string of stories about Russell Quirk. My three involve a phone call to Portugal, a quote about a price index, and playing cards: I’ll save them for another day. 

But the significance of Emoov’s departure isn’t about personalities at all. Instead, there are lasting industry issues created by Emoov’s demise.

Firstly, it raises a question mark over the future of online or hybrid agencies.

Much has been written and said on this subject in recent days, and with Purplebricks’ latest figures being released next Thursday much more will be said before Christmas. But it’s not the industry chatter that will be most damaging to online agencies in general.

Instead it will be mainstream newspaper headlines like this one from The Sun that will crucify online estate agents: ‘DOWN AND OUT: Emoov goes into administration leaving hundreds of home sellers out of pocket’. 

And this one from the Mail Online (the world’s best-read online news, by the way): ‘Home sellers hit as online estate agent Emoov goes into administration - months after merger with Sarah Beeny's Tepilo.’ And these clever ones - from Sky News (‘Online estate agent Emoov faces repossession’) and The Times (‘Emoov estate agent hands back the keys’).

Both Money Saving Expert and Which? have given advice out to sellers who had put their trust in Emoov, in some cases quite close to its collapse, and were left stranded. 

These negative headlines in the mainstream media will have a corrosive effect on public confidence in online agencies. And they risk negating the tens of millions spent by those online agencies on advertising, too.

It’s thought that the poor image presented by Emoov played a part in Purplebricks’ decision to intervene and get at least some PR bonus and public goodwill from the issue.

Secondly, there is a question mark over crowdfunding platforms where companies like Emoov seek to raise monies. 

Just a few months ago Emoov completed a crowdfund of a reported £1,923,060 from 1,119 investors with a pitch that included a claim the firm was worth around £100m. This valua-tion was just about halved as the crowdfunding call was nearing an end: this may be legal, but is it right? 

That’s not for me to judge, but I bet the small-scale investors have a view. I wonder how those individuals who put money into Emoov’s summer 2018 crowdfunding call (average investment £1,718.55p) felt when they found the company was being sold with a target for buyers well below the £100m cited initially?

Should crowdfunding platforms do more to verify and police the claims of companies? Should the Financial Conduct Authority do more?

Let’s see how well, or otherwise, online agencies and PropTech firms do when they next make big calls for crowdfunding investors’ cash.

Thirdly, what are the secret boardroom thoughts of the large scale online agency investors?

Savills and LSL Property Services bankroll a lot of Yopa, Carphone Warehouse founder Sir Charles Dunstone and business partner Roger Taylor are key backers of HouseSimple, while one-time star investment fund manager Neil Woodford and German publishing house Axel Springer have substantial stakes in Purplebricks.

There is no inkling at all that any of these is about to do a U-turn and some of the personality issues in Emoov are not replicated elsewhere. But be under no misapprehension - any of these large-scale investors would move out at a moment’s notice if losses became unacceptably high or prospects of profitability became unacceptably remote.

They will be looking at Emoov and, one can imagine, they may be a little more nervous than they were a few months ago. 

Perhaps those in charge of high-spending so-far-unprofitable online agencies deserve some sympathy for the difficult decisions they have made and will have to make. But, let’s face it, they probably don’t deserve as much sympathy as the employees of Emoov who have lost their jobs in the run-up to Christmas.

*Editor of Estate Agent Today and Letting Agent Today, Graham can be found tweeting all things property @PropertyJourn

  • Steve James

    The online model as it stands does not work and is not viable. The cost per instruction is massive and the only way this model can survive is to change the employment structure of the LPEs and increase the fee. Purplebricks is bleeding money from its neck. The staff churn is massive and complaints are horrendous. The majority of the LPEs are being underpinned and have been told to keep their diaries open throughout Christmas and the new year hence very low morale. Customer service stinks. Michael and Kenny Bruce have made a massive judgement error by branching out overseas too early. The US market is not performing anywhere near where they need it to be and Australia is on its knees with the CEO Dinsdale resigning. The online hype is fading and although it will be here to stay it won't be a big player as it is.

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