GetAgent: Online estate agents may have been struggling even prior to the pandemic
Data from estate agent comparison site GetAgent.co.uk has revealed the potentially troubling position of online estate agents even prior to the outbreak of coronavirus.
The data, drawn from GetAgent’s interactive dashboard, revealed that total market share for all online estate agents has dropped from a peak of 6.35% in September 2018 to 4.8% in February 2020.
New monthly listings for sector leader PurpleBricks peaked as far back as April 2018, at 6,358 in that month.
However, its new listings rate declined to a pre-coronavirus average of 4,400 per month in January and February 2020.
PurpleBricks’ share of the overall estate agency market dropped from a peak of 4.25% in August 2019 to 3.45% now.
This drop in listings between 2018 and 2019 means it could be on course for a comparable reduction in year-on-year revenue of approximately £7.8m per anum (11%) when it next reports.
Taking into account the pre-coronavirus rate of 4,400 listings per month, versus a 2019 monthly average of 4,846, this could mean a further dilution of revenue by £6m per year.
For HouseSimple, listings were 156% year-on-year and market share increased to 0.61% from 0.21%; however, this is at the expense of actual revenue as it became a free service in 2019.
Yopa saw listings drop by 21% year-on-year, and market share go from 0.65% to 0.61%.
The online estate agency sector has raised approximately £300m in equity funding to-date, from the likes of Neil Woodford, Charles Dunstone, ToscaFund, Savills, the Daily Mail General Trust Group and the Barclay brothers.
Colby Short, founder and CEO of GetAgent.co.uk, said: “Estate agency as a whole has never been short of its critics, but this criticism certainly seems to have shifted towards online and hybrid agents over the last few years.
“This is always going to happen as an industry evolves and there is no doubting that the online model provides a very cost-effective method of transacting when compared to the traditional agent.
“However, this more DIY approach to selling does have its pitfalls.
“Many customers feel as though they’ve been left a little high and dry when it comes to the completion of a sale and that they didn’t achieve the price they would have otherwise.
“This seems to have had a knock-on effect on the popularity of online agents with even the industry leader, Purplebricks, seeing a steady decline in business.
“With yet more uncertainty now shrouding the market, it’s likely that many home sellers will value the professionalism, service and accountability that comes with a traditional agent and the online market share will continue to suffer as a result.”