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‘Estate agency branches will soon go the way of the horse-drawn bus’

Scottish estate agent says every trend in the industry points to it eventually adopting the self-employed US operational model.

Nigel Lewis

A leading industry figure has ‘reluctantly’ concluded that the estate agency branch will soon be a quaint part of high street history and that the only conclusion he can draw is that agents will eventually all be self-employed, Purplebricks-style operators.

That is the incendiary claim made by high profile Edinburgh agent David Alexander whose company DJ Alexander is in the process of launching a platform, Apropos, to offer agents a way to set up their own letting agency business from home.

In a column published this morning in The Scotsman, Alexander claims that the recent acceleration of estate agency closures to almost ten businesses a week at the moment is an augur of things to come.

“Respected competitors may disagree with the sentiment that High Street estate agency will go the way of the horse-bus and the traditionalist in me partly wishes they were right. But the facts speak for themselves,” he says.

Hub offices

The 59-year-old founder of DJ Alexander, which has large ‘hub’ offices in both Glasgow and Edinburgh, says he initially considered creating Apropos into a ‘hybrid’ style app that would include physical branches before realising going completely online is the future.

Alexander says that when he started up his company 36 years it would have been unthinkable that tech would have changed the industry so significantly.

Link to Comment on Rent Controls“Who could have imagined that such an innocuous-sounding name like Purplebricks would revolutionise estate agency in much the same way as EasyJet has done for flying and Amazon for retail sales?” says Alexander (pictured, left).

David will be speaking at tomorrow’s Negotiator Conference in central London. Read his column in full.

November 28, 2019

One comment

  1. Everyone knows I am not a fan of Purplebricks, mostly because I see the the model as flawed and multi-million pounds have been burnt doing the wrong thing, rather than improving the business model by funding more research and getting better tech, so the client is more at the centre of the proposition.

    So when David, expounded that Purplebricks has helped the industry move forward, steam came out of my ears. That is until we spoke and he took the time to explain his business model, and the vision he had, and the serious investment and time behind his new baby.

    Then I understood that Purplebricks, was for David a metaphor for doing agency in a different way, to assimilate the needs of a new type of customer, with different ways of communicating and the shape of how they want to do business.

    Then I found myself in agreement with a lot of what David had to say, and on Friday I hope we get the time to talk further.

    I am not sure that all the high street offices will disappear overnight, and if they do, the cost of the office, will be replaced by extra revenue to keep the brand alive, as with Purple bricks and their massive spend on this.

    For me I approach it from the other end, the industry is changing because the customers needs are and I fully embrace the need that millennials have for a quick omni-channel response to everything, including the sale and purchase of property and all the processes in-between.

    However, I am a little nervous that the millennials unstoppable appetite for services and goods, instantly at the click of a button, is now driving the property sector too fast and too hard. Clearly, many companies are now being set up to feed a new type of savvy, consumer, but, the danger in the property sector is the lack of maturity in some of the business models.

    For example, iniatives like Mojo Mortgages, may well be on trend for these clients a fast track way to get a financial mortgage advice, but, they in turn are reliant on a tie up with Monzo bank, which itself is a new fintech / Proptech company with no high street presence, whose origin can be traced back to Crowdcube, (another recent online fintech company) and an instantaneous crowdfund of over £1M.

    Since then Monzo has had further injections of capital, and its valuation has skyrocketed, but, so too have the number of issues regarding its service and security, all documented in the financial press. These may be teething problems or not, time will tell.

    I suppose what I am saying is that – at the very fast rate that some things are changing in the ‘traditional’ world of agency – many co-operations and inter company collaborations are sometimes founded upon organizational foundations which are less than five-years old.

    And this lack of tried and trusted maturity, can cause problems, if any of the ‘jenga block’ partnerships fail to deliver and need to be removed, and it is often the poor shareholders and users of the service who are the losers.

    Recent Fintech peer to peer lenders like ‘Lendy’ failing with over £160M of losses, may be in a different financial sector to mortgage business regulated by the FSA, but, with Metro bank also in the doldrums, what they had in common was they sought to be disruptors of the banking sector, instead they may well be the victims of it.

    I am all for change, and making the transaction of property a better, quicker and faster and more enjoyable path. Having previously been an estate agent for over 30-years I often dreamt that there must be a better way of doing property.

    With the proptech revolution in full swing I am sure the industry will get there – but the irresistible force of the millennials and Gen-Z with their needy, challenging and inquisitive mindset, may well be as much a help as a hinderance, until a new and tested pathway of what ‘new estate agency’ looks like in the 2020’s and beyond becomes established.

    For sure it will not be a horse drawn cart, but I am not certain it will be central hubs with self-employed, or partner agents, much will depend on the future models of property portals, and the impact there.

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