Online estate agent set to make redundancies as it blames Brexit uncertainty

An online estate agency is considering shedding jobs, it was confirmed to EYE last night.

House Network put the blame on Brexit uncertainty.

We had been told that there was due to be a consultation meeting yesterday with employees at House Network.

It is not known how many employees may be involved, but in its last filed accounts, the business said it employed an average of 49 people throughout that year.

Mark Readings, founder and managing director of House Network, told EYE yesterday evening: “As the first online estate agency, we have seen many changes in the sector.

“As a result of the current market uncertainty, we may need to adjust our employment levels to ensure our business model remains stable.

“We are looking for the Brexit uncertainty to be removed so that the underlying strength of the UK economy can be reflected in the housing market.”

House Network says it was the first online agent in the UK, narrowly beating Emoov to that claim.

Co-founded by Mark Readings and Graham Lock – no longer with the business and now an industry consultant – the business was incorporated in 2003.

The termination of the appointment of director John Slade was posted at Companies House last week.

The firm’s latest accounts, for the year to the end of February 2018, were published on Companies House in December.

The accounts show that whilst total equity stood at minus £952,709 in 2018 (compared to plus £493,229 in 2017), the profit and loss reserves went from minus £5.042m to minus £8.602m.

The accounts include an asset value of £2.6m for the business’s computer software.

The accounts say that the directors of House Network “have agreed to support the company to meet its liabilities as they fall due for a period not less than 12 months from the date the accounts are signed”.

x

Email the story to a friend

28 Comments

  1. Trevor Gillham

    That’s sad to hear as HN were the first real online estate agents, they went from private sales to offering listing on RM very early, if i recall correctly.

    Report
    1. Bless You

      thats it the model is broken.  No way onliners can compete with the gorilla marketing of local agents .

      bricks are spending a fortune mass marketing to only a dew 1000 people who put their house on the market.

      incredible really. its like an accountant doing it when they can only attract a few businesses..

      hedge fund fake business at its best. govt. need to wake up.

      Report
  2. JonnyBanana43

    Brexit uncertainty. What a load of rubbish.

    More like “I’ve over stretched myself and my business model doesn’t work, so let’s blame Brexit…”

    Ever since the vote big and medium sized business have been able to use the Brexit excuse. Now it’s the online agents too.

    Zzzzzz

    Report
    1. PropertyInvestor68

      100%! If it’s not the companies themselves blaming Brexit the media makes the assumption anyway (Honda.)   Would Housenetwork be profitable in a thriving market? Currently 20% of their stock is SSTC, this is well below the industry norm, suggesting Brexit is being used as a scapegoat for their own shortcomings.

      Report
  3. Moveaside01

    Brexit? So nothing to do with the fact that the budget ‘Call Centre’ estate agency model simply doesn’t work then?

    Report
  4. Property Ear

    How nicely put put – ‘We need to adjust our employment levels’. Put bluntly, ‘Some of our guys are in for the chop’.

    Thank goodness the computer software is worth £2.6m.

    In all seriousness, this is just the tip of the iceberg for much of the industry as a whole, in terms of redundancies.

    How can it not be?

    Report
    1. Andrew Richardson

      If I remeber correctly Emoovs computer system was worth £2m but they eventually flogged it for £300k.

      Report
      1. PeeBee

        Ten million was the figure Quirked.

        Sorry – I typed “bu11sh!tted around”.

         

        Darn you, autocorrect…

        Report
  5. AgencyInsider

    The ‘value’ of the software is surely highly debateable. Looks to me like a way of propping up the balance sheet.

    Report
    1. Property Ear

      That’s what I meant!

      Report
    2. PropertyInvestor68

      Emoov also grossly overvalued their software; a large part of why the discussions dragged on. Who is going to pay millions for software that the founders cant turn profitable? Your high street CRM providers are integrating the same functions hybrid agents have in their software already.
      If you want an innovative CRM system now it needs a feedback loop on the following data after the email was opened:
      How long did they stay on the property? vs similar price houses/ bedroom numbers/ sq footage/ parking arrangments? How long were they on specific rooms? How long did they look at your info on the local area?
      This wil continously refine your search criteria on applicants. Obviously you can take this further i.e if someone spends 5 minuteslooking at kitchen details and 5 seconds on the lounge, the AI could change your frontshot to a kitchen shot on the details they recieve.
      This is do-able today, the issue is that not enough agents have the money to purchase these products, AI developers know this, and will focus their developments into industries that are cash rich and more open to innovation.

      Report
  6. Property Poke In The Eye

    Brexit…. is just an excuse.  The Vendor “Do Your Own Viewing Model” is ok for a few players.  Agree with Trevor, Housenetwork were the better DIY model when it came to paying upfront.

    I also had a website before 2003.  So would that not make me an older Online Agent too?

    I also need a valuer to value my software from 25  years ago  it has to be worth more than £2.6m, surely!!!

    Report
  7. MisterP76

    It seems there are a lot of companies using the nearing of Brexit as an excuse to downsize and/or shed staff.

    It is similar to how some firms use the backend of a recession as an excuse to economise.

    Wait and see, wait and see…..no our business model isn’t getting better…….unload whilst there’s an excuse to use!

    Report
  8. rsvstu97

    As we all know the stack them high sell them cheap brigade rely on volume, pure and simple. No volume no business.

    Report
  9. Robert May

    I’m not convinced by the value of  the software, unless they receive  a subscription revenue from its use I can’t see it worth anything like £2.6m  
    There was a noticeable change in their fortune in the 15-16 financial year which is so identifiable and so obvious I can’t see how  such a dramatic change to what up until that point looked like a solid and well run business (a credit to them) was down to Brexit.  I’d suspect the change is not  down to anything other than heavily investor subsidised portal intermediaries grabbing business from them.
    Traditional agency has taken a financial thumping from  disruption but the stubborn resistance of the sector to break through 5  or 6% means those that have grown have done so at the expense of others  in the sector.
    I have to say in all the times I have looked at agents gaming the portals and making false claim, not once can I recall House Network appearing on my list of spivs.  
    Rather than blame Brexit,  unnerving the  greedy sheep and their group-think investment in disruption might be a strategy worth considering. Without  external investment their main competitor would struggle to  keep up it’s very public awareness campaign.

    Report
  10. WiltsAgent

    Another loss making disrupter finally facing up to reality. As for their software being worth £2.6 million I’m afraid I sprayed my morning coffee everywhere at that. As for their profit and loss reserve of minus £8.6 million they should look on the brightside, Purplebricks have lost more than that since 1st January this year.

    Report
    1. Thomas Flowers

      It appears to me that since the fall of emoov all the large call centre agents are now stating that they are able to cover debts and can continue trading for the next 12 months.

      Perhaps, regulators now understand the risk for those users paying upfront and have insisted on this?

      Where does that leave these directors if any business that states this then fails within that 12 month period?

      Emoov apparently spent 6 million pounds or so on their software and sold it with branding etc for circa £300K?

      I do hope that House network is not using this £2.6 valuation to keep afloat?

       

      Report
  11. Property Pundit

    ‘Brexit uncertainty’ hasn’t stopped Housesimple from offering to sell houses for FREE for instructions by 2nd April. Selected Postcodes only (DN, HD, HG, HU, HX, LN, LS, S, WF, YO; or in one of the following postcode districts BD1 – BD23, NG18 – NG24, NG34, OL14, PE10 – PE12, PE20 – PE25). Plus they have the money to back the offer with TV advertising. Utter madness or what?

    Report
  12. HertsLocalagent

    Funny how the keyboard agents are out when there is bad news about online agents but stayed quiet about Your Move/Reeds Raines?

    The industry as a whole is in trouble not “online models”

    wake up

    Report
    1. ArthurHouse02

      The industry as a whole is not in trouble. Poorly run businesses with poorly trained staff are in trouble. Many of us on here have slammed the way that Your Move etc have treated their staff, they are a poorly run company with an awful structure in place and those at the coal face havent had the support to enable them to thrive. The likes of PB, Emoov, Tepilo had relied (IMO) on the appearing to be cheaper than professional estate agents to hook in business. They fail because they are a poorly run business who dont understand what their client wants and will fail to attract repeat business.

      As i said, just my opinion.

      Report
    2. PeeBee

      “Funny how the keyboard agents are out when there is bad news about online agents but stayed quiet about Your Move/Reeds Raines?”

      Sorry?

      There have been 162 posts to date on the various news articles here on EYE since the initial news broke on 5 February.  And now it’s spilling over into this thread – and possibly others too.

      I’d hardly call that “staying quiet”, HertsLocalagent.  I don’t think any reasonable person could.

      I would suggest that it is you that needs to wake up.  None of the rest of us can sleep for the stench of coffee.

      Report
      1. HertsLocalagent

        ok PeeBee.

        Keep doing the same things you did 10 years ago and blame Brexit and online models.

        The number of estate agents in the uk will half this year.

        Report
        1. PeeBee

          Sorry – you seem to have me confused with someone else.
           
          Who is blaming Brexit?  Not me.
           
          Who is blaming online models?  Not me.  They have an awful lot to answer for, but you can’t blame them for Brexit.
           
          Who thinks that 50% of Estate Agencies will close this year?  NOT ME.
           
          Certainly not the vast majority of those that actually do the job their clients employ them for, anyways… whether High-Street based or otherwise.  ArthurHouse02 comment above is 100% on the money – it’s just a shame your agenda won’t allow you to acknowledge that.

          Report
          1. agent orange

            I wish 50% of my waistline would disappear over the next 12 months 😉

            Report
        2. Property Pundit

          The number of estate agents in the uk will half this year’

          Your evidence for this is what?

          Report
          1. PeeBee

            Evidence?  None whatsoever

            Blind hope?  Bucketloads.  It’s what the weak need to survive the oncoming of their own career crumbling around them.

            Report
  13. qubes1832

    Tune in next week for our weekly story of ‘the business is failing so let’s blame Brexit!’

     

    Utter rubbish…

    Report
  14. HIT MAN

    Well thats the start of whats to come for on-liners, get rid of them and RM and be done with it.

    good bye and be gone!

    Report
X

You must be logged in to report this comment!

Leave a reply

Thank you for signing up to our newsletter, we have sent you an email asking you to confirm your subscription. Additionally if you would like to create a free EYE account which allows you to comment on news stories and manage your email subscriptions please enter a password below.