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sancho panza

The Estate Agent share price thread.

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'All the signs point to tough times ahead for high street estate agents, as online firms undercut them on cost and deliver “the flexibility customers want”.

The claims were made in yesterday’s Sunday Telegraph which said that online agents’ share of listings on Rightmove are now 7.1%, up from 2.4% in 2015.

The article also says that the average traditional agency fee  is £4,300 and the average online agency cost is £633.

The article – which attributes to EYE a list of largest estate agency groups by property listings as at last December – says that while the online market is still relatively small, it is growing “at a rapid pace”.

The article, by Rhiannon Curry, goes on: “Some might say that it is not before time. Traditionally, high street estate agents have a bad reputation for poor service delivered by men in shiny suits who charge an exorbitant fee.

“They have suffered as rents and business rates increase their overheads, amid wider turmoil on the British high street that has seen shoppers move their business online.”

The full-page article quotes one seller who used Purplebricks and said it saved her over £12,000.

It also quotes a buyer who purchased through a local agent, Oliver Burn, in Stockwell, London, and was happy with its service. But the same buyer said she only looked for properties on Rightmove, and that it was “too much of a faff” to look in estate agents’ windows.

Russell Quirk, boss of the newly enlarged Emoov business, says in the piece that it had merged with Tepilo and Urban because the market needed to consolidate: “A lot of investors were only interested in backing one or two companies, and from a consumer point of view only the biggest firms command that credibility and trust.”

He also says that while online firms save consumers money, it is important that they “provide the same service and outcome – if not better – than a high street estate agent”.

Lee Wainwright, CEO of Purplebricks in the UK, said that there is significant scope for online firms taking market share: “I don’t think it will ever be 100% online and I do think there’s room for high street agents, but we think it will be 30% to 40% in the near term.”'

 

http://www.propertyindustryeye.com/portals-getting-closer-to-competing-with-agents-in-a-crossing-of-the-rubicon/

'

Portals across the world at getting closer to competing with agents, it is claimed.

Expert Mike DelPrete, who describes them as ‘best frenemies’, says in his latest analysis: “Portals and agents have a sympiotic relationship. While they may not always like each other, they both benefit. Portals have been reticient to get directly involved in the transaction, for fear of upsetting agents (their biggest customers).”

But he says that direct competition between portals and agents could come in several forms:

  • A portal could launch its own brokerage/agency
  • A portal could launch a Purplebricks-style agency which would be fed leads through the portal
  • A portal could buy and sell homes directly

In all scenarios, says DelPrete, the portal would take a much bigger share of the total agents’ commission pool.

He says that the move would make sense.

The portals would gain massive audiences, leading to low customer acquisition costs; they would also operate a consumer-oriented brand built on trust and transparency; the portals already have the technology to do it; and finally, they would be seizing the opportunity to create a one-stop shop for consumers.

DelPrete says that three recent events show that portals are getting closer to crossing the rubicon.

The first was the £125m investment by Axel Springer in Purplebricks.

The second was the announcement by US portal Zillow that it will buy and flip houses directly from consumers.

And the third was last month’s announcement that US private equity firm Silver Lake is poised to buy ZPG for $3bn.

DelPrete concludes: “There is undeniable movement from real estate portals towards getting directly involved in the transaction, and putting them in direct competition with real estate agents.”'

 

 

The comments are hilarious.

 

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Starter for 10

 

DgOdoGNX4AAswDY.jpg

 

Foxton homing in on the 50p price that was termed "a freak trade".

 

DgOdz7oXkAAenj5.jpg

 

Meanwhile...purple bricks are either grabbing market share or are set for a massive collapse like these 2.

 

 

image.png.81bf1df6859f3f2303175979d104e2ff.png

 

 

 

 

All is not well in the world of gel.

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Posted (edited)
1 hour ago, Cosmic Apple said:

You beat me too it.

 

Looks like this thread has migrated here in the nick of time

 

Dgh7jMKXcAAoqjN.jpg

Oh how the shitey have fallen

 

Dgh78WIWsAAA-VF.jpg

 

 

Edited by TheCountOfNowhere

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1 hour ago, spunko2010 said:

Foxtons were ~100 last time I checked this. How low will it go? :x

Theoretically, 0.

1 hour ago, spunko2010 said:

Foxtons were ~100 last time I checked this. How low will it go? :x

As I reported on TOS a couple of years ago, a mate of mine in the city said they thought the share price would collapse and was a precursor to the London bubble collapsing.

AFAICT, London house prices are heading down now and people just havent realised yet how low they are going to go.

 

 

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6 hours ago, spunko2010 said:

Foxtons were ~100 last time I checked this. How low will it go? :x

 

4 hours ago, TheCountOfNowhere said:

Theoretically, 0.

 

Given their large corporate HQ overheads,they run on a much higher cost base than your local independent.

I think both are toast but time will tell.

I wouldn't want to be a creditor of either if they go pop.

The only question is whether either will make it to the point when lettings fees get banned.

 

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15 minutes ago, sancho panza said:

 

Given their large corporate HQ overheads,they run on a much higher cost base than your local independent.

I think both are toast but time will tell.

I wouldn't want to be a creditor of either if they go pop.

The only question is whether either will make it to the point when lettings fees get banned.

 

Foxtons are debt free. Their shop leases could be a problem if tied in for a long period though.

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16 minutes ago, Castlevania said:

Foxtons are debt free. Their shop leases could be a problem if tied in for a long period though.

Total assets of £177mn,that includes £100mn intangibles and goodwill £20mn

Lettings income £66mn out of £117mn

Operating expenses £111mn

 

And as you say they're debt free.The reason these corporate EA's are toast is head office costs and the manpower intensive small branch network imho.

 

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Posted (edited)

https://www.investing.com/equities/countrywide-plc-balance-sheet

Countrywide well,what can we say.

Assetsof £697mn  include £279mn goodwill...muhahahahahahaaaa.:ph34r: and £220mn intangibles.

Liabilities include £213 mn long term debt,

Total revenue £671mn versus operating costs of £871mn.

And that's before the lettings fee ban.

If they jsut sell the goodwill and intangibles for book value they'll be ok.

 

Edited by sancho panza

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Posted (edited)

http://www.frankinnes.co.uk/buy/search/LE2/

Here's a sign of the problems.Frank Innes LE2.

22 properties for sale.in LE2

13 available for let LE2

 

compared to a local independent-who admittedly has two branches(but then Frank Innes  has a second in the city centre as well)

Knightsbridge LE2 152 for sale

Knightsbridge LE2 8 to rent.

The thing is that about 4 years ago,Frank Innes aka Countrywide paid Knightsbridge a large sum rumoured to be in the £100,000+ bracket for his rental book.

 

As I've said,Countrywide are toast.

Minus another 8.73% this morning to 50.2pence.

 

 

 

Edited by sancho panza

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On 25/06/2018 at 23:19, sancho panza said:

 

Quote

It is our intention to reduce the levels of debt by at least 50% through additional equity finance.  Our major shareholder, Oaktree, and the Company’s lender group are supportive of this approach.  This process remains at an early stage and the Group will update the market on these initiatives at its interim results on 26 July 2018.

As much as I'd like to see investors in EA scum throw some good money after the bad, I doubt they will last that long. 

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23 hours ago, sancho panza said:

http://www.frankinnes.co.uk/buy/search/LE2/

Here's a sign of the problems.Frank Innes LE2.

22 properties for sale.in LE2

13 available for let LE2

 

compared to a local independent-who admittedly has two branches(but then Frank Innes  has a second in the city centre as well)

Knightsbridge LE2 152 for sale

Knightsbridge LE2 8 to rent.

The thing is that about 4 years ago,Frank Innes aka Countrywide paid Knightsbridge a large sum rumoured to be in the £100,000+ bracket for his rental book.

 

As I've said,Countrywide are toast.

Minus another 8.73% this morning to 50.2pence.

 

 

 

 

11 hours ago, Bear Hug said:

 

 

As much as I'd like to see investors in EA scum throw some good money after the bad, I doubt they will last that long. 

You've nailed it.

Anyone looking at the above example of Countrywide in my local area will see how they're just not competitive anymore,especially in a low volume environment where they're up against more motivated self owned local EA's.

Personally,I think High St EA's will disappear longer term,but the big chains with burdensome head office pay rolls will go first.

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On 25/06/2018 at 22:16, sancho panza said:

https://www.investing.com/equities/countrywide-plc-balance-sheet

Countrywide well,what can we say.

Assetsof £697mn  include £279mn goodwill...muhahahahahahaaaa.:ph34r: and £220mn intangibles.

Liabilities include £213 mn long term debt,

Total revenue £671mn versus operating costs of £871mn.

And that's before the lettings fee ban.

If they jsut sell the goodwill and intangibles for book value they'll be ok.

 

'Unusual expense (income)' £237m

What on earth is that?

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