Almost a year ago we conducted some research. Purple bricks at that time had just been named a super-brand and we wondered to ourselves, did this mean trouble for the physical branches? With this in mind, we surveyed estate agents across London and asked them about the impact that online estate agencies were having on the sector and the likelihood of them jeopardising the future of the more traditional models. 90% it seemed were not feeling threatened in the slightest? Should they have been?
Research to date
When online agencies first appeared about 10 years ago, many thought that their appearance would seriously shake up the future of the traditional estate agency model. The new model did appear lucrative and there’s no doubt that a very apparent move towards the online model ensued. The rise in online agents however in recent years appears to have tailed off, with many ceasing to operate. Assessing the situation today, the market share for online agents is currently thought to be a somewhat meagre 6%. And the general consensus among experts today is that they are extremely unlikely to capture much more of the market, yet alone get the lions share.
Why has the online model not had more success?
There’s a number of reasons for this, but the main one is quite straight-forward. If you think about it, a property, for most people is probably going to be the biggest investment they are ever going to make in their life. Such an epic purchase doesn’t come without complications and to put it quite simply – the vast majority of people just don’t want to walk that road alone. There’s the hassle of the viewings, the negotiations and the entire sales process – all off putting for many. Most people still need a level of guidance and reassurance that only the traditional model can truly offer.
Lessons from online and a future forecast
Whilst there will always be a place for an exclusively online estate agency model, the target market for this is probably always going to be relatively niche. Consumers do however increasingly want the speed and convenience that online services offer. The likely-hood for the foreseeable future therefore is potentially a hybrid between the traditional models and online. “we expect to see significant convergence between the ‘bricks and mortar’ and ‘online’ market sectors, with traditional agents improving their technology, streamlining their processes and closing many of their branches. At the same time, online/hybrid agents will expand their local presence and expertise range of offerings.” David Jacobs – Yopa.