Internet Buyers Dominate West London Property Market
Some agents getting poorer deals for clients by failing to adapt to change
According to the latest industry figures 80% of property purchases in London are now originating on the Internet. Yet despite this sea change in the industry the names that dominate the High Street remain much the same. Internet specialist agents have made next to no impact.
In fact the internet has proved something of a boon to traditional agents allowing them to reach a much broader audience of buyers than traditional media at much lower cost. Figures released by the GLA recently showed that over 90% of families with an income of over £50,000 had the internet at home. People peering through estate agents windows is becoming a thing of the past.
Sal Hussein has been investing in property in London for over twenty years. He has seen a major change in the market in recent times. He said, "The internet has gone from a standing start to dominating the market for origination. Now every property transaction I am involved with starts with the buyer or tenant doing an internet search."
Rather than agencies setting up on the internet the traditional agents still dominate but are using property portals to consolidate their presence on the web.
Sal says that the internet strategy of the agent is the main factor in choosing who represents him. He feels some of the best old school agents were slow to adapt to the change. It soon became clear to him that better prices and rents were being achieved by agents who were using the internet effectively. He believes that this can make a difference of up to 7% on a transaction.
Counter-intuitively he says smaller agents have been better at using the net. In his view the larger agents spent heavily on producing top quality web sites which they expected property hunters to gravitate to because of the extra functionality. The smaller agents have placed more reliance on property portals. In practice, people tend to start their search by looking at sites like FindaProperty.com which currently receives over 1 million user sessions a year. They can cover a far higher number of properties in a much shorter time in this way and people care less about the quality of the agent's web site than the properties they have to offer.
The ideal scenario would be for all properties to be listed on a single database. The closest available resource on the net to that ideal is the search engine on this site. The software intelligently searches other resources on the internet and consolidates the information in an easily searchable list.
A spokesperson for Neighbour Net, the company which developed the software, said that listings of all available properties in a single place should not be too far away. "The technical problems involved are not great. We just need to ensure that we design the service in a way that means agents who are our clients get more business than those who are not." With over 10,000 searches a month on a database that covers a limited geographical area agent the potential for agents is obvious and growth is likely to be exponential as the number of listings expands.
Despite the dominance of the internet in this field, agents continue to spend heavily on other media. One West London agent confided that magazine based advertising was increasingly directed at their clients rather than property hunters. She said that after making an instruction clients often complain if their property did not appear in the next edition of the local magazine. She said, "most response from clients comes from the internet but it is important to get the balance between different types of media right."
Steve Roberts of FindaProperty said, "there is still the impression, fading though it is, that advertising on the net is necessary rather than desirable, and something that some agents would rather not be bothered with."
It is almost certain that the estate agency market will get more competitive. Volumes are still way off peak levels in this part of London and more entrants continue to arrive. Those agents that fail to adapt to change are likely to be the ones who will no longer be with us in the next few years.
April 15, 2004