It’s been a theatrical week in Westminster with talk of defections and duplicity worthy of Shakespeare.
Yet the estate agency world has not been without its drama, too.
For it really does seem as if we have reached ‘peak online agency’ and that this niche sector, once thought of as the scourge of high street firms, is in retreat.
Here’s the evidence:
- Purplebricks loses two key chief executives and 24 per cent of its share price in one day, with company revenue expectations revised sharply downwards;
- House Network, one of the original onliners in the UK, announcing redundancies;
- market share for the top 10 online agencies failing to break the five per cent threshold so far this year, when not so long ago there were forecasts of 10 or 20 per cent or more;
- only modest progress on crowdfund website Crowdcube for Love2Move, a platform seeking cash to spread online agency facilities to traditional agencies.
All this bad news - coming quite literally in just a week - hardly bodes well for a sector still reeling from the fall-out of Emoov and Tepilo collapsing just two months ago.
If that wasn’t bad enough, the financial background to some agencies make depressing reading for online advocates.
Housesimple is reported to have lodged results with Companies House stating pre-tax losses of £13.6m in the year to March 2018; Yopa is reported to have had losses of some £18m in the calendar year 2017, its most recently-reported trading period.
Bring it back to today and according to property consultancy The Advisory, those two online agencies’ extra listings for the two weeks to February 21 this year were very modest indeed.
Yopa (charging each client on a no sale/no fee basis £1,999, assuming the sale goes through) pulled in just 407 new listings. Housesimple (£995, also no sale/no fee) pulled in just 395.
Of course these two agencies, and other online operators, have additional revenues from add-ons and other fees; they also have backers with deep pockets.
But unless we are all missing something here, it’s beginning to look as if the scale of losses and long-term debts being built up by many online agencies far outweigh likely revenue in a market where they cannot - combined - muster more than a five per cent share.
It’s not that online agencies will disappear (they won’t, although they will surely become fewer in number); it’s just that they continue to promise a revolution for the majority of buyers and sellers which, to date, those buyers and sellers have clearly not wanted.
Some traditional agents have long been saying this, of course, so they would regard the events of the past week as merely new examples for an old story. But there are now two new factors.
Firstly, the public has become sceptical of onliners. There seems little or no growth in the proportion of sellers using online agents, despite massive sums spent on marketing: if not by marketing, how can that five per cent share rise significantly?
Secondly, talk of disruption and innovation by online agency chiefs looks a bit old hat now. It doesn’t sit well with a 25 per cent share price fall and eight figure losses, while 19 out of every 20 vendors still prefer traditional agents.
Which brings us back, of course, to that theatrical analogy.
For now online agencies must deliver a show-stopping performance of the kind they have promised for so long, with growing share and verifiable completion figures enough to sway a sceptical audience.
If they don’t, they will have to settle for being merely bit-part actors, a few of which are likely to be exiting stage left, pursued by a bear (and some angry creditors).
Incidentally, you can see the latest revelation about Emoov’s collapse here.
*Editor of Estate Agent Today and Letting Agent Today, Graham can be found tweeting all things property @PropertyJourn