Online agency market share has stagnated. They seem to get away with ludicrous valuations based on growth of market share or user numbers, but with no history of profit or even a clear strategy on how a profit could be made.
The online agency model is also starting to unravel. At some point in the future, some investor somewhere is going to expect a return – but at the moment there seems no sign that these businesses can be profitable. Emoov claims it’s worth £100m but hasn’t made any profit and is close to collapse without additional funding.
Humberts have completely revamped their strategy, deploying a method of regional hubs that cover large areas and moving away from the concept of multiple high street offices.
Foxtons have closed down multiple London offices due to the inefficient nature of multiple high street offices
Other larger agency firms with cash reserves are buying up independent lettings agencies with strong managed portfolios, which will bolster revenues ahead of the impending tenant fee ban
Countrywide are going nowhere slowly with their “back to basics” plan. Stock price is miserably low and deploying a plan that shuns innovation and refuses to acknowledge the changing trends in the market place is arrogant
Independent firms are either holding their nerve or looking at sell out opportunities, pointing at risks from market uncertainty, the squeeze on fees and the upcoming tenant fee ban.
The industry is in a real state of change. Which is a good thing. For far too long have agents gotten away with sub-par service and little innovation. Regardless if the online business model is sustainable or not – what the online players have done is given the industry a much needed shake up and forced all the players to think innovatively or at the very least, differently.
Published by Jamie Gray | Jamie@nexaproperties.com