Online agent eMoov is to raise its prices – and is currently running a promotion on its website, encouraging sellers to list now.
A notice on the eMoov website is inviting sellers to list now before its prices rise, warning: “Price Freeze – Avoid our upcoming price increase, SAVE £100 and get FREE Premium Listings!” The notice says sellers can save £100 by listing for £579 now.
The current charge without the discount is £679 but eMoov founder Russell Quirk told EYE that the new fee would be higher.
He said: “We have raised our core fee five times in the past four years and that’s very much part of our strategy, hence we will be raising our pricing again soon and as per the ‘heads up’ on our website.
“We launched in 2010 at just £295 and therefore we are now twice that price.
“Our intention has always been to demonstrate that we are not just better value than the high street but that our proposition is better in its customer service demonstration too.
“Those in our sector that can also show such superior service levels should be able to raise prices too, albeit that some will raise prices without having built those firm foundations. And that won’t work for them and will see them pouring more and more money into ever higher and more unjustifiable CPAs.
“eMoov and the best in the online/hybrid sector can justify higher prices in exchange for better service.
“The converse applies too in that traditional agents that continue to charge high fees for poorer service, have a limited shelf life now given that even as the online sector raises costs, the high street are still several times more expensive. The consumer has the choice… More for less. Or less for more. I think we know how that plays out.”
Quirk declined to give a new figure or date for the changes.
Separately, House Shop founder Nick Marr has warned that online operators will need to raise prices to make a profit.
Marr, whose private sale by owner site the Little House Company was reinvented as the House Shop to include estate agents’ listings, also said that many of the larger online operators are yet to make a profit and may need to consolidate.
He told the Financial Times that this could be an issue as sellers may be less willing to pay higher amounts upfront.
Marr said: “A lot of these guys are not making any money. How much does it cost to get each customer when you are using TV ads and so on?
“They are going to have to put their prices up, and when people pay upfront, if you’re asking for £1,000 or £1,200, they might be uncomfortable with that. I think they are going to struggle.”
In September Purplebricks increased its charges from £798 to £849 and from £1,158 to £1199 in London.
Addressing the issue of online agent profitability, Quirk told EYE: “The ‘profit’ debate is for now a misnomer. It’s hard for some in our industry to comprehend the concept of growth businesses, I know, but the online agency sector is not a short-term lifestyle play and is not about how much per month you can afford to pay for your BMW.
“This is about three or so disruptive players taking a 50% chunk of the estate agency market eventually and how much that makes such a business worth. It’s what’s happened in insurance, travel, comparison websites, recruitment, consumer goods and, soon, banking etc.
“There’s a bigger picture which the incumbent critics are not seeing.
“That said, will online players consolidate to get there quicker?
“Yes, but in my opinion there’s not many players in our space that would truly represent consolidated value. Some businesses combining with other businesses might simply make two poor executors twice as undesirable.”