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Andy Jones maintains that a hybrid estate agency model is the way to go
The rise of the online estate agency had plenty of exposure in 2016, with various much-publicised - and sometimes amusing - references to the demise of high-street agents. But I do not think it is all over, because traditional agents still have a lot to offer.
Since 2004, the number of high-street estate agents has nearly tripled to about 19,300. As a result, the average number of sales has dropped to just over 60 per branch per year, 73% lower than 10 years ago. With online agents now vying for market share, the competition is increasingly tough.
To add another dynamic to an already changing market, 'build to rent' has emerged as a new asset class. The first specifically constructed build-to-rent blocks are now being completed, and I believe a hybrid model that combines the efficiencies of an online business with the personal service of traditional agents will be the most effective way to make such schemes a success.
The impact of the internet
Though met with suspicion by some at first, it is hardly surprising that online estate agency has flourished. The internet has revolutionised the way we live and work, and on average, 94% of buyers or tenants now go online to source property. Changes in market behaviour and the move towards online services are having a significant impact on high streets. Household names are dwindling as banks, travel agents and other retailers are being forced to rethink their business models, as are consultancies such as estate agencies.
Consumers are more internet-savvy than ever, and it does not take them long to become experts on something. However, anyone who has tried to diagnose an illness online and been faced with a terrifying list of potential ailments will know that Google research can be dangerous, which is why most people still go to the doctor. Similarly, most homeowners, whether they are selling or letting, instinctively turn to the internet to research the worth of their property. But there is still a risk involved with valuation in this way as price data online lacks context and does not take into account a...