UK’S online real estate rivals begin to squeeze
A growing number of people are being attracted by the cut-price fees of online estate agents in Britain. The sector has caught the eye of big-name investors like fund manager Neil Woodford and traditional branch-based agencies which once dismissed online rivals are having to react.
Mindful of the impact web-based start-ups have had on industries like gambling, taxi services and banking, traditional high-street agents are beefing up their own digital businesses, cutting fees and costs and cherry-picking the competition.
“You’re (either) watching and wondering what’s going to happen or you’re going to step in and take action,” says Ian Wilson, chief executive of estate agents Martin & Co, which has over 300 offices and in September said it would buy online rival EweMove.
Fees from residential home sales in the UK are worth about 4 billion pounds a year, according to government data. Online agents’ fees of between 500-1,000 pounds have pushed traditional estate agent commissions down to around 1.3 percent of the value of a sale from about 1.8 percent five years ago, according to analysts at UBS. They see fees falling further, to 1 percent.