Hybrid and Online Agencies See Market Share Plummet
February 21, 2023 7:11 pm
The latest data reported by the Negotiator magazine reports firms like Purplebricks have seen their slice of instructions drop significantly in a year as the effect of the Covid lockdowns fall away. This coupled with their already troubled business model does not bode well for their investors, who have seen share prices tumble.
Market share for hybrid and online estate agencies has fallen 21% in the last 12 months, new research shows.
According to data agency TwentyEA, hybrid and online agents now have only 6.1% of all new instructions.
The share of the overall market peaked for hybrid/online agencies during the first Covid lockdown in May 2020 at nearly 10%, but is now at its lowest in four years.
By region, online agencies perform best in the North, with 11.3% market share in Yorkshire and The Humber and 10.2% in the North West. Our own research via Rightmove shows that in and around Formby that figure is much less, with Purplebricks and similar online or hybrid agents at around 5.7% market share for 2023, comparing favourably with the likes of the South East and the East of England where the figures show 4.7% and 4.3%.
Hybrids are most commonly used for lower value properties, with 9.2% on instructions under £200K and only 1.1% for £1 million-plus.
Stuart Ducker, strategic solutions director of TwentyEA, says: “The subdued performance of these hybrid/online agents in the last two years, in a seller’s market where demand has outstripped supply, seems counter-intuitive. “The failure to be adopted by sellers of higher-value properties will inhibit online/hybrid agents in establishing a significant market share in [areas] where the property value and density of housing are greatest.”
“Vendors consistently opted to stick with traditional agents.”
Ducker adds: “Where the fixed-fee lower-cost model arguably ought to have prevailed, our analysis shows the opposite, as vendors consistently opted to stick with traditional agents.
“This is most pronounced in the higher value brackets, where online agents appear to have reached a ceiling.”
This echoes our own experience with only limited numbers of vendors opting for the low fee option, appreciating that market knowledge and great customer service comes at a price. Focus is all too often on the level of a fee, as opposed to what a professional agent can achieve over and above price expectations. A few hundred pound saved here or there can often be to the detriment of the client in the long run, often to the tune of thousands of pounds.
2023 shows Stephanie Macnab Estate Agents with a 37% market share of new instructions, and 41.2% of all new sales agreed, proving that if you do a job well, clients will put their trust in you.
Stephanie Macnab added, “we are not resting on our laurels or being complacent. The market is ever changing and we will continue to adapt our service levels and advice to clients to ensure they achieve best price”.