The online estate agent market is forecast to grow to 10 per cent of the overall sector by 2220, despite representing less than 2 per cent of the market today.
At least, that is the bold prediction put forward by Will Clark (pictured), Managing Director at SellMyHome.co.uk, who firmly believes that many high street estate agents will need to consider changing their fee structures in order to remain competitive.
He points to the fact that the rise of online estate agents offering to sell properties for as little as a few hundred pounds has significantly increased competition on the high street, making it harder for high street estate agents to justify what he describes as an “archaic percentage fee structure.”
“It all comes down to pricing”, he said. “When you consider what high street estate agents charge for the services that they provide, it is mind-blowing.”
The online estate agent is planning to raise £10 million over the next 12 to 18 months with a view to expanding the business and increasing its own market share.
“So far we have used internal funding to give us an injection of cash to support the business. But while we do have aggressive growth plans, it will be another 12 to 18 months before we go to market to raise the money,” said Clark.
When it comes to raising fresh funds, Clark says that his firm were considering using a crowdfunding platform but has now concluded that the private equity route would be a better option.
Clark, who is also the head of RentMyHome.co.uk, commented, “We were considering going down the crowdfunding route to raise funds, but to be honest, Estates Direct, headed-up by Steve Smith, founder of Poundland, beat us to it. For what we do, crowdfunding can be an amazing platform to raise money but it does, in my opinion, rely on a company having a big name, like easyProperty.com, which is backed by Sir Stelios Haji-Ioannou. In many ways it is a bit of a PR stunt that does not always work. Therefore we will be seeking venture capital funding.”
Earlier this year, SellMyHome.co.uk launched the first ever virtual open house, using the advanced technology of Virtual Walkthrough via Facebook. The event, which was held in March showcased a newly launched two-bedroom apartment in Hackney, demonstrating the growing demand for new online alternatives to simplify the property viewing process for both buyers and sellers.
The Facebook open house marked a significant turning point for the property market, according to Clark.
He remarked, “It’s no longer a question of if, but when the industry will become fully digitalised, and it’s our duty to our clients to make sure that we’re ahead of the game, leading the way, and still delivering the quality of service that you might expect.
“In today’s time poor society, customers have been crying out for a way to cut down the hours spent on the business of property viewings. You can pay your bills, book a holiday, or even get a date online, and we’ve had a real demand for the same flexibility when it comes to viewing properties – our clients want to be able to narrow down their choices at work, on the move, or in the their own home.”