The announcement by George Osborne that online-only estate agents are to be encouraged, possibly at the expense of the high street model, appears to have caught the entire industry by surprise.
Those hardly knowing what to say yesterday included online and high street agents, but most of all those with, or planning, a hybrid model.
For example, online agents, who were canvassed for reaction by EYE, were so incredulous that they asked to be sent links.
Some of the usual suspects had still not sent in their comments by last night.
High street agents re-tweeted our story yesterday, but none suggested they had known of the move beforehand.
Meanwhile, the National Association of Estate Agents has reacted carefully to the revelation, reported yesterday on EYE, that the Government wants to encourage online-only estate agents.
Ministers, led by Chancellor George Osborne, are to call for evidence in the new year.
Yesterday, NAEA managing director Mark Hayward told EYE that local knowledge remains paramount.
He said: “Bringing innovation and competition to the market is a good thing, and we encourage and support anything that can help bring down costs for consumers. Consumers should have choice when buying and selling property.
“Many high street agents have very strong online presence and work in tandem with estate agency portals.
“High street agents have networks of contacts who are searching for property and offer a variety of different techniques and channels.
“High street agents understand local markets and will advise on the right tools for individual clients.
“While strong online presence is essential, it is most effective when teamed with expertise and local knowledge.”
Last night, one of the online agents invited to comment was Alex Gosling, of HouseSimple.
He told EYE: “Even the Government is recognising that the high street estate agent model is outdated and punitive.
“High street agents have had it their own way for far too long, charging the consumer a level of fees that is simply not justified.
“The online estate agent sector is shaking up the market and giving consumers what they want – a simple, quick, innovative and inexpensive service.
“Our customers are saving an average of more than £5,000 on a house sale compared to a high street agent, for a service that is almost identical.
“The online estate agent sector is set to grow rapidly over the next 12 months, offering a cheaper but almost identical service to the high street.
“It will be interesting to see how the high street agents will respond to the competition, but they will have to respond because the consumer won’t accept fee levels as they stand.
“Estate agency is going to change forever, and that can only be good news for consumers.”
Comments (18)
We have put up a Twitter poll so you can vote on whether Osborne’s aim to encourage onliners into the market will be good for the consumer. Just look up @propindeye on Twitter to find it.
I’ve just had a thought. Do we really need local politicians with local knowledge? Why not do politics on-line? We could all participant in the vote on bombing Syria.
Aren’t 99.9% of agents online now?
I’m. Aren’t 99.9% of agents online now?
I’m actually quite pleased that the government are “endorsing/encouraging” online agents.
Would professional agents really want or need Government approval?
Until online agents provide the same level of service as professional agents their growth will be stunted, government backing or not.
so the govt want to kick in the teeth the high street agent? why? if high street agents are not competitive in the service they offer they will close. Its a free market. What benefit or business of the Govt is there to ‘favour’ an online business over a high street business? Consumers have the choice.
Lets hope there is no positive discrimination. Think of all the Business rates high street agents pay -v- online agents another nail for the high street?
Im shocked if they are going to positively help online agents to the detriment of highstreet agents as a policy.
I agree with Jacqueline Emmerson comments and I also think local knowledge, once gone and assuming the big O has his way, could result in completely redeveloped types businesses emerging. For example No fee estate agency charges the buyers to look, or no fee agency tied in with conveyance services or financial services, no fee agency tied in landlords, no fee agency owned by large property corporations who just pick off and re-sell the stock that interests them at a profit of course. There could be no fee on line charging just advertising costs to businesses associated to buying/selling and moving. I am sure there are a lot more business models out there.
Just one question: In any of these businesses does the home owner, who normally pays, get any actual benefit? Are they protected from rogues (who move in to any unregulated industry at the cost of it’s reputation) and thieves or worse! Is there any way of ensuring the homeowner isn’t completely screwed because at the moment Mr Osborne this is the door you are pushing open.
Yet another Online Agent that is allowed to make a ludicrous claim of savings vs the High Street. There may well be some properties/vendors that have saved £5,000. But an across the board saving of that much for everybody. Really?
In an interview published at the weekend even eMoov had downgraded their savings claim to just over £3k.
Outside of London the savings for vendors are not that great compared to the High Street. Perhaps that’s why the online penetration in the Regional markets is not that great.
Irrespective of choice the only reason that Online Agents can exist is because they can list with RM & Z. Who built the traffic on those sites – the High Street Agents who still provide 97% of the stock to them!
I certainly don’t care about traditional or online agents but what the hell is going on with Lord Snooty and His Pals’ government? This bunch of soppy public schoolboys must have Margaret Thatcher turning in her grave because they are actually almost socialist in their incredibly interventionist attitudes.
Surely both will persist. Some people like to visit agents, some don’t. The public will decide where they wish to shop not the government. Imagine you become a large online agent, you still need an office to house your staff. So why not advertise in your office windows. Oh, then it looks like a high street estate agents!
Aren’t 99.9% of agents online now?
The big difference is those that sell claiming ‘we save sellers £ billions for pennies’ and those who charge a fair fee for a better service which often wins over cheap.
The biggest problem facing any person or body pressing the case to government as to why Osborne is wrong-headed on this issue is that if what they say does not ‘fit’ with the stated policy, which the civil servants are charged to implement, then they will largely be ignored or simply steam-rollered.
Time for the NAEA/ARLA to step up to the plate and present the benefits to the consumer of traditional estate agency.
Its amazing that this has been allowed to get this far.
You will be waiting along time! They accept membership from online agents.
SP – Surely that is a pragmatic business decision by NAEA/ARLA? Look ten years down the line. What do you see? Online agents accounting for 5%/10%/20% of the market? They exist, they are part of the estate agency industry and, love them or loathe them they are here to stay. Better to have them in the tent etc etc…
Same way agents are standing up to online agents with portals why not do the same with NAEA and alike? Vote with your feet people! NAEA does nothing for you save £300 per branch every year and do not renew membership.
Paul, its been this way since 2008 when the OFT existed and made a findings publication.
What they implied was that more online models. Agency models AND agent user tech be encouraged.
I have a question: Which would you rather do (a) Pay someone £500 up front to deal with your biggest and most valuable asset who will put it on the internet and then sit back and do very little else which really amounts to nothing or (b) pay nothing and get a professional to invest their money in promoting your property, accompany all your viewers, negotiate a better price for you so that you end up with more in your pocket and deal with all the wrinkles and legal difficulties to make sure that your sale goes through and they get their investment in your property back plus a reasonable amount for their trouble.
A bit of a no brainer I think.
Perhaps Mr Osbourne should realise, or be educated by the NAEA/RICS management, that the abortive costs in a house sale are not attributable to estate agents We get nothing if a sale falls through, but the solicitors, surveyors and building societies all get their fees regardless. Perhaps he should start his ‘clean up’ there rather than attack our profession. Encouraging people to sell online will not save them a penny. Indeed it will probably add to a sellers costs when they have spent their £500 online and got no result so revert to a professional local agent to get the job done.