The end for traditional estate agency…? Not so sure

The iProperty Company – the portal which allows new homes developers and private sellers but bans estate agents – is to start an aggressive marketing campaign this spring. It has also raised a question mark as to whether Rightmove and Zoopla will continue to accept listings from online agents, something that OnTheMarket already does not allow.
The crowdfunding pitch describes the iProperty Company, launched in November 2012, as a global online property community which connects owners with buyers directly. The pitch says: “With no need for estate agents, we enable individuals to buy, sell or rent their homes, absolutely free of charge. This saves both buyer and seller a great deal of time and money.” It is also carrying an offer for anyone investing over £1,000 to receive a free For Sale or For Rent board.
Co-founders John Candia and Brian Blake, former boss of Swinton Insurance, says they are determined to “smash the hold that estate agents have on the property market” and that their site could soon rival Rightmove, Zoopla and OnTheMarket.
Candia said he believes estate agents add no value to the property market.
“If anything, they hinder the operation. Dealing directly with people you get a true picture of what is going on. You’re not relying on someone in the middle.” This is obviously the reason that most sellers, in our opinion instruct an agent, so they don’t have to deal with complicated negotiations or with purchasers themselves; they wish to have a that degree of separation.
Candia believes that most home owners know what their property is worth, and if in any doubt can buy a valuation from Hometrack for £19.95. However, I’m not sure I can see most of the residents of central London, or indeed those with complicated properties outside of the capital having a stab at what their property is worth, or relying on a Hometrack valuation. They generally rely on an agent’s opinion who is at the coal-face.
Currently in the UK online agencies only account for 2% of advertisers on Rightmove and Zoopla and none are able to advertise at OnTheMarket. What happens if Rightmove and Zoopla change their policy to appease the growing discontent from traditional agents who incidentally make up close to 90% of their advertising revenue? The iProperty Company claims to have over 8,000 properties listed in the UK, more than any online agent. However, almost all the properties currently listed on the iProperty Company website are not private sales but homes being marketed by developers, after a deal last year with the National House Building Council. Developers using the site include Barratt, Bovis and Persimmon.
iProperty insists it is not an online agent. It will monetise itself by offering additional services such as For Sale boards and photography, which is something an estate agent does, no…? It was Tesco’s provision of sales boards when it tried to get into the private sales market that helped land the supermarket’s model in trouble, as it would have been deemed to be an estate agent.