Purplebricks-style hybrid estate agencies may be the future of estate agencies. This is according to Home Owners Alliance, an influential consumer property body.
Author Claire Carponen, writing in the HOA blog, said that the model must be scrutinized after Savills, a well established estate agency company, invested in a hybrid agency, YOPA.
According to Claire, Hybrid agencies offer a more complete service that is closer to what traditional agencies offer, while online-only agencies offer just the most basic services. In her blog, she also asks if there is still need for agencies to have branches on the high street since the emergence of hybrid agency.
“You can buy and sell a home with an estate agent without stepping foot into their office. They are, just places where you look at pictures of homes – something you can do more online. Our high streets are sprawling with estate agents but in a few years’ time they could look different,” she says.
Household Names Now Adopting the Hybrid Model
For a while now, Household names in the UK house-buying and selling process, such as Countrywide, Connells, Savills and Foxtons, have been contemplating on how best to respond to the new wave of online estate agency. The question for them is: How much of a threat to their dominance does the new wave of online-only agencies and hybrid agencies pose to their business, given how much these agencies have been spending recently on TV ads?
There is no doubt these traditional agencies still have the biggest share of the UK market. But if the recent acquisitions are any guide, it seems they have concluded that it is only a matter of time before they catch up. Hence, the need to, “innovate or die.”
Online and Hybrid Agencies Gaining Market Share
Russel Quirk, founder and CEO of eMoov, believes that hybrid and online agencies are beginning to gain a share of the market at a rate that cannot be ignored.
“Six years ago, you couldn’t measure the inventory of online agents – there was too little to bother,” admits Quirk. “Since then, the market has been roughly doubling its market share year on year from those small beginnings: from a half of one per cent to one per cent to two and then to four. It’s a trend that hasn’t stopped yet I don’t think: 2016 should see a doubling again in the hybrids’ share of the market.”
Use of Online Medium is Now a Mainstream Activity
Will Clark, Managing Director of online agency Sell My Home, believes that consumers use of online and hybrid agencies is now a mainstream activity. And he believes that the trend will only keep increasing. He said: “In 2016, we are moving well beyond the innovators and early-adopters picking this up. Now it’s the early majorities that are in the frame – hence the TV ads from the likes of Purplebricks and Easy Property. Like others that are now active in the UK marketplace, we are projecting that online agents will account for 15% of the market by the end of 2017. That’s steep growth over the next two years but it’s only an extension of what’s already achieved.”
Trust and Transparency
One reason why online agencies have gained popularity is the level of transparency involved which garners trust from users. Their fees are a lot more reasonable and clear. And as the trust continues to grow, it's expected that it will be a more mainstream activity.
The traditional agencies, it seems, have now decided that a hybrid model is the best way to keep their edge in future. Explaining its decision to invest in YOPA, Savills said it has invested to usher the agency into the “high volume segment of the UK market.”
"We have followed the rapid advance of the online 'hybrid' estate agency model over the last year. This investment broadens the group's access to the UK residential sector by enabling us to take an interest in the high volume segment of the market, with over one million annual transactions, to which Savills has had little exposure to date" said Chief Executive Jeremy Helsby.
"We have been impressed by YOPA, whose technological edge, dedication to transparency and focus on the client at the heart of the sales process, all resonate with our core values and the way we do business" Helsby added.
Online-Only Agencies Need to add Personal Touch
A lot of industry experts believe that while traditional agencies need to take advantage of the online phenomena, online-only agencies need to add some traditional approach too to be successful. Buyers and sellers often want some personal interaction when attempting to make such a big sale.
Also, it is difficult to understand the motivation of a buyer or seller and provide a service that satisfies their unique needs without meeting them or having a good understanding of their local market.
Birchover Sales and Lettings operate a successful hybrid model in Derby. They were recently shortlisted for New Business of the Year award by Derby Telegraph Business Award. Commenting on their success and why online-only agencies need to add some traditional approach, Director Carl Bridge said, "We definitely understand the desire of online-only agencies to shake up the industry and Birchover is all about that, too, in the Derby market. Yet, while we can show our customers how they will enjoy competitive pricing and their property showcased to many people, what we also offer is the personal touch. Our team is committed to working with each customer to understand the reasons why they are selling or letting their home. We spend time focusing on what is important.
Sometimes they want a speedy sale, or they might most want to achieve the asking price. Often there will be other, human, factors at play which can only be solved by us taking time to understand their motivations. Our experienced team uses all this information to ensure the customer selling or letting their home is happy with our approach. Online-only estate agents might need to also adopt some traditional methods and our hybrid model could be the eventual outcome.”
Article Source: The House Shop
