Britain's property market is currently going through a possible deviation from its normal business model where traditional estate agents thrive and generate revenue. There has been a dramatic increase of number among online estate agents who offer less expensive fees compared to what traditional estate agents offer. Investors are slowly moving their attention from tradition estate to online agents.
Due to the global slowdown, the property sector is expected to expand even further while interest rates linger on lower records.
In a recent research conducted by Hardman Research Firm, Purplebricks, an online estate agent, is currently on the fourth rank on the list of biggest UK estate agent. The company was launch last 2014.
This scenario can be closely compared to the taxi-hailing app Uber which continues to challenge the traditional taxi services.
Aside from Purplebrick, other online estate agents like EstatesDirect.com, HouseSimple.com and eMoov.co.uk generated an estimated amount of $6 billion yearly. EstatesDirect.com is a project set up by Steven Smith, founder of Poundland.
In relation to competitors' reaction to this new business model, Redmayne-Bentley Investment Manager David Battersby said, "It's not unusual to see some negative reaction in shares of a fairly new and innovative company at a time when the broader market sentiment is pretty bearish."
Woodford Investment Manage also seems to be leaning towards this promising investment since they have bought 29 percent stake in Purplebricks. It is only safe to say that Purplebricks is to be taken seriously. Neil Woodford manages about 14 billion pounds worth of investment.
Despite the all too familiar patterns of online services overtaking traditional business models, FinnCap analyst Duncan Hall still thinks that a lot of customers would still prefer old school, face-to-face discussions with traditional agents.
But it should also be disregarded that new online firms have formed partnerships with local experts. Thus, creating a bond between traditional customer service and the ease of online transacting.
