An objective industry view
It has been a strange month.
Leaving any company after 21 years – especially one as good as Douglas & Gordon – is always going to stir the emotions, and being able to say I’m not an estate agent after 37 years is also weird but somehow liberating.
Life now, however, is like the beginning of a Marvel Comics movie where the pages flash across the screen at a rate of knots, and it’s not slowing down.
The range of services being offered to the industry is both increasing and bewildering, and I’ve been struck by how my perspective has altered in such a short time.
It’s sometimes easy to forget that the entire panoply of property services – portals, printed media and outdoor advertising, boards, EPCs, company cars, offices, websites etc etc – are completely paid for by the fees solicited from two groups, sellers and landlords.
At some point in the near future these two groups will be taken over by a new generation, one brought up using technology and with significantly different expectations from those dishing out the cash now.
My experience of the next generation is that they are allergic to speaking on the telephone and prefer to engage in services where, ideally, they can do everything via a screen – with no human interaction. Well, humans are still intrinsic to the property buying process, but everything around it is up for change.
Given that this new group have c. £3.5bn to put into our businesses, they’re going to expect us to do it how they want, not how we want.
Telling them how it works isn’t good enough, and as we’ve seen in other industries, even those where we feel humans are important – like getting a cab (Uber) and renting out our properties (Airbnb) – have come under pressure from the way new age consumers want to live.
One of the strengths, and a weakness too, of our industry is the fact that it really is the last bastion of the entrepreneur.
No qualifications, mostly small competing independents, big money – think chains and portals, have led to a fiercely competitive industry that is resistant to change unless there’s a commercial advantage. Technology seems unable to stem the increasing cost of headcount, portals and transaction cost which, along with inertia in the area of conveyancing, place the industry in an ever-tightening vice.
As grey hair starts to creep in with the owners of these small businesses, unless they have offspring happy to take over, consolidation is the only way forward – but these local entrepreneurs have provided the lifeblood, and most of the knowledge, over the years.
So will this resource be lost? Let’s hope not.
Blithe dismissal of the new breed of digital agent is ostrich-like in its naivety. Having now met most of the protagonists, they are determined, resourced and adaptive to change.
It may be that a race to the bottom on fees (not that they are the only ones responsible for this) will hamper some, but the will to find a model that “generation me” can use is undimmed and some will find a way.
Just because a model they produce results in fees that are not dissimilar to the high street, does not mean a new generation of buyers and sellers wouldn’t rather use it.
Quite how an idea formed whilst wandering in the fields with my wife can help all of this is another matter … but there’s little doubt that having a fresh and totally objective view has given me a clearer perspective.
Over the next few weeks I’ll try and explain what it is … along with what it sometimes takes to zone out.
NB This blog was first printed as a column in www.propertyindustryeye.com on 13th Oct 2016