Results of The homes
alone.co.uk industry Survey
April 2011
Introduction
With a property market double dip expected according to a Mail on Sunday article and
9.2% less high street estate agency branches according to a report by the FT.com, there
is little doubt that much is changing in the traditional estate agency business model.
We believe that there will always be a need for Estate Agents who can deliver a good
service, but a key factor for the future for all agents will be a model that allows
competitiveness against low-cost businesses who are challenging traditional based
models.
In April 2011 HomesAlone.co.uk conducted a survey involving UK Estate Agents and
Solicitors/Conveyancers to engage in a debate over the changing business model of the
High St Estate Agent and the market in 2011.
The objective is to understand what industry professional like yourself are thinking so that
we can get a flavour of what the future business model may look like.
Introduction
Base: 264 Estate Agents / 75 Solicitors/conveyancers.
Range: one branch, multi branch, internet based and high st brands.
Results suggest that the industry is undoubtedly divided with strong
opinions and thoughts from all sides of the debate. One thing is clear –
there is a definite move towards change, whether it is downsizing,
technology or culture change.
What part will portals play in the future? Does local press have a shelf
life? Results suggest that many agents are considering these and many
other factors.
Overview of survey participants
Agents taking survey
Internetbased
agent
9%
Secondary
location
(not major
High St)
30%
Solicitor/conveyancer
Internet based
conveyancer
7%
High St
Agents
61%
‘More and more agents opening results in
a smaller slice of the market for everyone
else. As establishment costs rise,
employment protection is greater, the
tendency is to over-value to gain
instructions. This clogs the market up
and distorts local price issues.’
D Earle-Brown.
Owner. David Earle-Brown.
‘The industry needs to be
more professional and ensure
value for money, and be
prepared to work hard to earn
proper fees, for delivering a
great service’.
Jim Parry.
Director Rains & Son
Manchester
Traditional
Solicitors/Conveyancers
93%
‘The industry is full of inefficient
businesses & agencies and
should be regulated ASAP, so
that the agencies giving a good
service and can improve the
perception of the industry to the
outside world’.
Phil McGrath
MD, Smooth Moves
Agency Model
Q. Do you believe that
the change is due to
Q. Do you believe the ‘High Street Estate Agents’
business model has changed in the past five years?
11%
Don’t Know
No
Yes
86%
‘The industry as a whole
needs to self regulate itself
more efficiently otherwise
the government will impose
its own restrictions’.
J.J.King Dip Surv MRICS.
Director Quinton Scott
Wimbledon
Unsure
Current
Market
Conditions
7%
Not
Applicable
9%
Internet
16%
Current Market
& Internet
64%
‘Estate Agency is a quickly changing
industry. Many traditional agents will
get left behind and fall by the wayside.
It is difficult to predict what the typical
business model will look like in 5-10
yrs time but easy to predict that it won't
be the same as now’.
George,
Director.
Elizabeth Davenport Estate Agents
Thinking about it
44%
No
39%
YES
Q. Have you changed your
business model in the past
three years?
Agency Model
28%
No
Don’t Know
15%
18%
57%
Yes
Q. To Solicitors/Conveyancers:
Do you think there will be fewer
High street estate agents in
2011 then in 2010?
‘Why the debate over online and
offline/High Street estate agents? There is
no difference in the product that they offer,
just the fee. Selling property is being
shaken up just like air travel and insurance
were 15 years ago. High Street estate
agents can cling on to their antiquated and
expensive business model all they like but
its no longer consumer friendly and,
fortunately, the consumer is beginning to
realise that’.
Russell Quirk
eMoov
‘I can see the industry moving
towards premises in secondary
locations, but (at least for the
medium term) there is a need
for clients to be able to enter
business premises, purely for
the comfort of the firm having
'substance'. A lot of our
business comes from
recommendation, personal
contact and previous
clients/repeat business which
will help the decision to move
to a secondary or even tertiary
location’.
David Clark
David Clark & Company, Ely,
Cambs.
Don’t Know
26%
Yes
No
56%
Q. Are you thinking of changing
your business model in the future?
‘Internet-only based businesses deny
themselves tradition to which many are
attracted. The trick is to run well placed offices
with the fixed costs shared between in house
cost centres e.g. Sales, Lettings and Financial
services and to make full use of the plus points
of the internet whilst retaining the personal
touch. Not possible from your bedroom, as
internet agents operate. You tend to buy a Rolls
Royce from a showroom not a bedroom’.
Neill McClintock
Franchisor McKinlays
Agency Model
120
40
30
0
1
2
3
Q. Do you think that an
agent for sales or letting
must have a high street
location to give a superior
service to their clients?
4
20
10
Don’t know
50
Varies14%
60
Local Press 1%
70
Local Presence 31%
Don’t know
80
Walk ins 2%
20
No Difference
40
No 31%
60
Yes 39%
80
Internet/Portals 34%
90
100
0
1
2
3
4
5
6
Q. Where do you get the biggest percentage of your NEW
business enquiries for instructions for rent and sales?
‘Internet advertising is now a must. However the costs are extremely high to
advertise on some & not value for money in my opinion. No doubt a few will
go by the wayside and the market leaders will then have little competition.
Also some lenders require their agents (To sell repossessions) to advertise
on specific sites!! Also as a high st agent we do get passing trade and I
myself will look in agents windows when looking to move. I see high St
agents will always have a place, such as high St banks & internet banks. I
have been in the trade over 30yrs and it has changed, but you can never
beat a personal service whatever industry’.
Jon Ash
Director Ash Residential Manchester
150
100
50
Yes
32%
No
Don’t know
45%
0
1
2
Q. Do you feel that an
internet based agent with
lower overheads can
compete with a ‘High St’
agent?
3
Solicitors/Conveyancers
No
answer
1%
12%
Don’t know
Yes
47%
40%
No
52%
Yes
48%
No
Q. Are you planning to change your business
model or mix in any way due to market
conditions?
No
49%
Yes
51%
Q. Are you having to cut costs in your
conveyancing department in 2011?
Q. Do you think the property sales market
will be more active in 2011 then 2010?
Solicitors/Conveyancers
are equally split on
their model and market
Sales vs Rentals
Don’t
know
Don’t
know
41%
44%
More sales
activity
16%
Less rental
activity
Less sales
activity
Q. In your area do you
believe the sales market
will see more activity
2011 then in 2010?
‘2011 will be an extremely challenging year for our
business but good times or bad, people will always have
reasons to buy/sell property whatever the market’.
Richard Brunsdon
(Sales Manager) Swansea
69%
More rental
activity
Q. Do you believe the
rental market will see more
activity in 2011 than in
2010?
‘Very poor sales market but
extremely buoyant letting
market’
Alan Pooles
Ridgeway Swindon
Q. In your opinion
what percentage of
your applicants for
sales or letting look
in the local property
press
Portals vs Local Press
Q. In your local area
do you believe that
local press advertising
is good value/good
Return?
No
53%
Sometimes
Varies
More
3%
8%
1
2
3
‘It is a great shame that some vendors
believe that a larger company has a greater
exposure to buyers (just because they have
a large branch network) when over 90% of
all enquiries come directly from the internet.
We find that newspaper advertising brings
virtually no results at all’.
Julie-Anne Marriott
Marriott Estates. Kent
55%
Less then 25%
look in local
press
Don’t know
29%
Yes
Don’t
know
15%
Between
25%-50%
4
Don’t
know
Yes
No
33%
11%
Not on
Right Move
36%
Q. Do you
believe that you
could ever run
your business
without
rightmove?
Portals vs Local Press
Q. How many portals do you advertise on?
60
50
Five
Four
Three
10
Two
20
One
30
None
40
No ans.
70
None
80
As many as possible
90
0
1
2
3
4
5
6
‘Internet advertising is now a must. However the costs are extremely high to
advertise on some, and not value for money in my opinion. No doubt a few will go
by the wayside and the market leaders will then have little competition. Also
some lenders require their agents (to sell repossessions) to advertise on specific
sites!! Also as a High St agent we do get passing trade and I myself will look in
agents windows when looking to move. I see High St Agents will always have a
place, such as High St banks & internet banks. I have been in the trade over
30yrs and it has changed, but you can never beat a personal service, whatever
the industry’.
Jon Ash
(Director Ash Residential Manchester)
7
8
9
‘Agency varies from location to
location. Village based very different
from City/Town. Older clients 70 + still
generally rely on traditional methods
but internet will take over. Portals now
provide to much info to prospective
buyers’.
Colin Mason FNAEA Principal
Colin Mason Estate Agents
Redbourn Herts
Q. In your
opinion, will any
other portal ever
be able to
compete with
rightmove?
Portals vs Local Press
Yes
72%
Not Completed
‘Fees in this industry are on the way down.
There should be a min fee for all agents
and also portals should consider their
customers’ situation’ . Chris Blamey
Fulfords Exmouth
45%
16% Unsure
Yes
19%
No
No
1
‘You can't just be on one Portal, you need maximum
exposure. Successful advertising is a mix, we need
to use it all to ensure Brand awareness ‘
Andrew Chard
Chard (London)
‘The web portal companies should look at decreasing
their costs in line with what the current market is
doing. If the market is slow (as it is now due to the
downturn in finance)then an allowance should be
made to reflect this with advertising costs. Any
newspaper and glossy magazines should also follow
suit’.
2
Don’t
know
3
No
Answer
4
Q. Should portals provide better value given the
current market?
‘By pushing up the costs, Rightmove is in
danger of alienating the very people that
have made them No 1’.
Simon Speak
Bridgman & Speak Estate Agents.
40
20
1 yr
Q. Do you think that the lenders are
making more funds available for
mortgages yet?
0
1
‘First time buyers must return in numbers. The government
need to show far more concern, they have to get tough with
the banks and introduce some simple affordable schemes to
kick-start the market. They could start buy asking a bread &
butter estate agent such as myself before forming a clueless
committee who are not in touch with the real world and likely
to come up with something so complicated and unworkable
that the whole exercise would end up a waste of time and
money’.
David Bunn
(Proprietor) Independent Estate Agent.
No ans.
60
Unsure
80
Many yrs
No
64%
‘Market will continue to struggle badly until the
banks become more pragmatic in their lending
criteria. We have cut our costs to the bone in our
struggle to survive’.
John McHugh
Director McHugh Estate Agents
More
No answer
18%
Lenders
3 yr
Yes
14%
2 yr
Don't
know
2
3
4
5
6
7
Q. When do you believe the lenders will ease
on the amount of deposit required?
‘Due to restrictions on mortgages for first time buyers
this is holding the market back. We need to see some
new 90% deals but at sensible interest levels; say 3 to
4%. This will have a knock-on effect throughout the
whole of the market and thus improve the UK
economy in general.’
Garry Abel
Sales Manager Crofts Estate Agents
Summary
 44% of agents said they have already changed their business
model.
 26% of agents said they are planning to change their model in
the future.
 55% of agents believe that less than 25% of applicants for
sales and lettings search in local press.
 36% of agents believe they could run their business without
advertising on rightmove
 11% of agents who took part said that they were already
running without rightmove.
Thank You
Homes Alone would like to thank all of the agents and
Solicitors/Conveyancers who took part
We apologise if we have not printed your comments due to
the large volume of comments we received.
The Homes Alone Team
We will be in touch with more information soon or you can
contact us on [email protected]