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Hybrid and online share of the market stands still, including Purplebricks

Latest listings analysis using Rightmove data reveals hybrid and online estate agents have yet to break the 5% market share barrier.

Nigel Lewis

estate agents

Online estate agents have once more failed to substantially increase their share of the housing market, latest figures from house selling consultancy The Advisory reveal.

Its analysis of Rightmove listings data for the final two weeks of January show that online and hybrid estate agents listed 4.8% of the 90,933 properties uploaded to the portal, up marginally from 4.58% a year ago.

Purplebricks continues to dominate, listing 3.12% of the entire market or some 65% of the online and hybrid sector’s output.

Despite this, investors appear to be tiring of the company’s inability to increase its overall market share. Its share price rallied to £1.30p following the General Election but has since slumped back down to its pre-election price of £1.07p.

Online agent

Gavin Brazg, founder of The Advisory, claims his figures show the online estate agent sector’s market share has stood still compared to a year ago and that Purplebricks CEO, who last month restated his belief to investors that Purplebricks can achieve a 10% market share, has a very big hill to climb.

The Advisory’s figures show that almost all online and hybrid estate agency’s saw their listings stand still year-on-year include Yopa and Purplebricks while HouseSimple, which has been heavily promoting its ‘free to list’ proposition in Nottingham, saw its listings three by nearly 100 properties year-on-year.

The report also reveals that the huge increases in activity reported by many agents including Knight Frank yesterday within its prime central London market analysis are failing to work through into the wider market.

The number of properties for sale on Rightmove is currently down 9,000 on the same two-week period in 2019 to 90,933 properties.

February 4, 2020

One comment

  1. With Brexit done, or at least a first stage decision made and carried through, January 2020 was destined to be a productive one. Agents started the year with a slightly higher pipeline of properties to sell due to a slow last sales quarter of 2019. Plus, some encouraged by more political certainty decided to list and sell.

    As we enter February the well priced and sought after addresses have gone under offer, and the uncomfortable reality is now setting in that stock levels to sell are moribund, and much property still sits on the market at too high a price.

    With the need to take fresh properties to market it is likely new instructions may in some areas have optimistic pricing attached to them. Which will not help matters. The underlying factors of 2019 still remain to a degree, house price inflation has factored many out of the market.

    Help to buy will in the first quarter of 2020 scoop up a large margin of the first time buyers and volumes of new homes will go under offer, rather than properties which traditionally fed the lower parts of chains of transactions.

    Regarding the fortunes of the online agents, with no online agent making a profit, and share prices of those listed in retrograde mode, 2020 may well see further exits from this marketplace.

    Whilst Purplebricks may have listed over 60,000 properties last year, its actual offering regarding service levels is debatable, and it is still burning through capital to continue trading. As they say you can only buy the market for so long.

    The final scenario may be that Axel Springer will take the firm private, adjust the model and service the low end, cheap fee, do it mostly yourself model, for which there is maybe a 5% to 7% client base.

    The true picture of the market will appear by month five, and with a cabinet reshuffle, and possible stamp duty changes, these factors may slow the market a little as cautious buyers wait to see if stamp duty will be removed in some price bands, or become the preserve of the seller, or if no change will be made at all.

    All of this will add pressure to agents to cut costs and be more efficient, and it will be apparent that proptech is to an extent a solution, alongside well trained and motivated sales teams. In the medium term, although there is the initial financial outlay, growth and sustainability of businesses will depend on how far along the road of digital transformation business owners are willing to travel.

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