Property technology (‘proptech’) companies have taken off in a big way in recent years. From Zoopla’s listings site to the Housecrowd, which allows members of the public to invest small amounts in houses, there are plenty of techie entrepreneurs trying to skim the cream from one of Britain’s most profitable sectors.
But the traditional estate agent has remained a key figure in the house selling process. Fixed price online challengers like Purplebricks and Sarah Beeny’s Tepilo have sprung up, raking in investor cash (HouseSimple just bagged another £13m in a round led by Carphone Warehouse founder Charles Dunstone) and staking their claims to a small-but-growing share of the market. But the vast majority of home sales in Britain are still arranged by a local agent with a shop front who charges a percentage of the sale price as commission.
Most of those traditional agents had resisted a shift to online but today Countrywide, the largest group of agents in the UK, announced it would be trialling a fixed fee hybrid service. Customers will receive a face-to-face valuation and then be able to manage viewings and offers online. At first it plans to trial the service with just three of its more than 50 high street brands, in the east midlands and the south-west, but MT imagines more will follow.
‘Today’s news recognises that people’s needs and expectations when selling and buying a home are changing,’ said Alison Platt, Countrywide’s chief executive. ‘Our industry-leading range of options will combine the best of Countrywide’s high street presence and people with a new service that gives people the best of both worlds - the trusted advice and support of a local estate agent and the convenience and control of an online option.’
Countrywide has been among the less technophobic estate agent companies in the past, with a hand in the launching of Rightmove back in 2000 and taking a stake in Zoopla. Today's news follows the announcement last week that Savills is leading a £16m funding round for hybrid agent Yopa, but the industry as a whole has been fairly resistant to the margin-munching move to online.
'I don't think Knight Frank perceives it as a threat,' Andrew Hay, the company’s global head of residential property told MT last year. 'Quite simply because it's all about giving good advice and good service, and sorting out all the emotional problems that come with the sale of residential real estate, and I don't believe you can do that in an online trading platform.'
And it’s not like Countrywide is giving up on its current model. Those who sign up to the online service will be able to switch over to the full, commission-based model at no extra cost. ‘We are picking up business from customers who set off with an online player and are disappointed, finding it more different than they expected,’ Platt told the FT. ‘This is a terrific risk-free way to do that.’ So it’s probably going to be a fair while before the estate agent offices that dominate many of the nation’s high streets begin to disappear.