Estate agencies seem to be running low on their financial resources, under-investing in their teams and technologies, leading to a possible crisis in the near future for both the online and the high street sectors.
This will inevitably be exacerbated by Brexit uncertainty and mixed messages about the global economy.
Back in 2016, I predicted there were more than 20% too many agents in the UK.
It’s taken a long time for my prediction to come true but we are seeing massive consolidation in our industry and I predict another 2,500 branch closures, probably in the next 18 months.
There's already warning bells around Purplebricks, with analysts at Berenberg, a multi-national investment bank, downgrading the shares from a Buy to Sell rating and warning they have ‘flown too close to the sun’.
This has been reinforced by the comments from finance website Motley Fool which has warned that Purplebricks may run out of money altogether unless it abandons its global expansion plans.
It even says that shareholders may not be willing to support a business that is unlikely ever to be profitable.
As for House Network, its fate looks sealed. Just two weeks after it was bought out of administration, it appears to have ceased trading.
Other online agencies are also struggling with their low fee model and will have to increase their fees if they’re going to survive.
This will bring them on to a level playing field with the rest of the industry, so they’ll have to up their game when it comes to customer experience, service and, most importantly, the quality of their people – many of whom have failed in the traditional sector.
They will also have to fully employ people, rather than have people who are self-employed. It’s hard to maintain consistent service, brand awareness and contact, with the high turnover that they have.
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