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Hybrid and online estate agencies win market share during Covid

But, while people embraced online alternatives in many areas of their lives during Covid, it only moved the dial by 1.3% for hybrid estate agencies.

Nigel Lewis

twentyci estate agencies

Online and hybrid estate agencies have seen their market share of exchanges increase by 1.3% to 8.3% year on year, says data agency TwentyCI.

This leap is a significant one, the research firm says, but warns that it should be greater given the huge home selling boom that followed the re-opening of the housing market last year.

TwentyCI’s Property & Home Mover Report from the third quarter of this year comments that: “With many sectors and categories having seen a significant shift online during the pandemic, estate agency has not followed suit with a relatively low and slow rate of growth persisting”.

This suggests that while more and more consumers are happy to do their own jobs online and also transact major purchases including clothes, cars and furniture digitally, selling or buying their home online still requires the face-to-face, scratch and sniff experience.

Dominant trio

The report also reveals that three estate agencies dominate the online/hybrid sector – Purplebricks, YOPA and Strike – who between them handle 70% of all the sales.

While overall online and hybrid agents continue to make slow progress in poaching market share from their high street rivals, they are making strides in two markets.

Online/hybrid agents have increased their market share within the £1m+ market by 24% during the pandemic, albeit from a ‘very low base’ of activity, and have increased market share by 24% in the North East.

But without these gains, the positions nationally would look less rosy – this kind of estate agency has lost ground in the West Midlands, Inner London, the South East, East Midlands, East of England, Wales and Scotland.

October 26, 2021

One comment

  1. But the top three online agents in real terms never make a profit, it is only shareholders cash buying the market.

    In April 2021 Purplebricks announced its first profit of 6.8M, but had 2.2M for selling off Canada concern. The year before it lost 19M, and 54.9M the year before that and 30.08M the year before that and 3.01M before that – so £107.1M of losses. And it kept going only by public and corporate investment piling in, keeping the company solvent.

    YOPA made losses of 17.8M in 2019, and losses of 30M in 2018, and we have yet to find out what its profit and loss last year, but over 65M of investment has been pumped in to keep it going and buy the market.

    Strike made losses of 26M and 18M in the last two accounting periods and has burnt through over £60M of investors cash to keep solvent.

    Looking forwards the slim profit made by Purplebricks may well go into the red as it has now to employ all of its ‘workers’ which will add an extra burden to its P & L.

    Also it may face a class action from former ‘workers’ looking for recompense as they may have in fact been employed, rather than acting as numerous limited companies doing work for the online agent.

    When the backers of YOPA or Strike call it a day and refuse to support the multi-million losses by throwing millions of further investment into a lost cause, the online agents will close their digital doors.

    Are online agents doomed? These models are, but the future agile models based on true new technology and end user UX probably will in fifteen years be a very common way to do property.

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