Member Article

Estate agents and the online property revolution

With the announcement that a number of high profile entrepreneurs such as Sir Stelios Haji-Ioannou of easyJet and Steve Smith of Poundland are making forays into the online property market, there is a substantial amount of evidence to suggest that 2014 will be the year that this sector is transformed.

Since March 2012, Rentify has managed a total of £306m worth of rental property, and helped over 500,000 landlords and tenants let, manage, and rent properties across the country, demonstrating that there is a significant demand for this type of service in the UK. The involvement of established business leaders from traditional offline industries underlines the viability and potential for the online model to provide a credible alternative to traditional agents: the future of lettings is not on the high street, it is online.

Part of the reason is that there is a far greater need for transparency in the property industry than exists today. A survey conducted last year found that the average administration fee for tenants renting a property through a lettings agency in London was £220, with the worst culprits charging up to £600. Instead of following the conventional high street estate agent model, online services democratise the business of selling and letting properties – with Rentify, for example, charging, on average, 80% less than the published fees of high street competitors due to a lack of overheads and rates for physical storefronts (in fact, full management costs landlords just £65 per month). This drastic reduction of administration fees is a trend that could well herald the end for the traditional estate agents.

Equally, outside of commission-driven agencies, there is an implication that customer service is much more of a priority – retaining landlords and keeping tenants happy is, after all, at the core of the online business model.

In the same way that internet banking and online news sites have transformed their sectors, online estate and lettings agents cater to consumers increasingly used to accessing services and information instantly. By embracing an infrastructure that takes advantage of the technology that customers already use in their daily lives, the sector has found a fresh way of approaching a large and well-established market – and one that has been validated by a significant wave of investment, both from venture capital firms and angel investors across Europe.

The accessible, intuitive, and cost-effective model of online property companies, whether sales or lettings, is surging ahead of the traditional high street estate agent set-up, and ours is a rapidly emerging sector with a strong potential for growth.

This was posted in Bdaily's Members' News section by George Spencer .