Earlier this month nine-branch London estate agency Chief Executive Lee Pendleton created a stir when he said agents should stop wearing ties and had his own cut in half to make the point.
It was, of course, a stunt typical of the James Pendleton agency boss.
But it had a more serious point; Lee thinks his clients no longer care whether their estate agent wears formal wear or not, a significant departure for an agent in an industry that cherishes being smart.
The Negotiator popped into his main branch near Clapham in South London to see what the 45-year-old has to say on some of the other topics the industry is grappling with.
“Purplebricks hasn’t had an effect on our business, but I grew up in Suffolk and Norfolk and I know quite a few agencies there who have been impacted by its model,” says Lee.
Lee says Purplebricks’ fees are so rock bottom that many vendors perceive them as a low-end offering, and recognise they have to pay for good advice and a good service.
He says he has had staff pose as potential buyers for Purplebricks’ properties and have received ‘zero contact or follow-up’ because the ‘money’s not there to support that back-up’.
“I just don’t think any of the players have got the positioning for online or hybrid model right yet – but they might soon – but they’ll never reach the recently claimed 30% market share.”
“This year it’s mostly all about survival and ensuring we get through what this market has thrown at us,” he says. “We’ve been stern with vendors and said if they don’t drop their prices then we can’t help them, and I think people are starting to get it.”
Lee claims he’s the only agent in London being this candid with vendors.
“I know other agents won’t like me saying that but why talk the market up when it’s in decline,” he says. “Too many agents are all about smoke and mirrors and the online ones are the biggest culprits.”
Lee says he understand why some estate agencies have switched to, or are considering, the hub-and-spoke model that enables businesses to operate away from the high street, but says it’s not right for his business.
“It would cost a fortune to exit our branch leases and I’ve calculated that in London the cost of an off-street central office for all our staff is comparable with the costs of our nine branches,” he says.
“I think hubs can work outside large cities but not here in the capital.” Instead Lee says he’s preparing to launch a ‘new concept’ office that, although he won’t reveal exact details, sounds like a cross between a WeWork office and an estate agency designed to entice footfall into his business.
James Pendleton pays ‘a lot of money’ to use both Rightmove and Zoopla but says that, although he’s still on a recently-renewed free deal with OTM, he would never pay to use the portal.
“We have not been a believer in OTM from the beginning and we’ve been very candid with them about that and really didn’t like its initial ‘one other portal rule’,” he says.
“We just don’t have the budget to pay full price for three portals.”