I was surfing on the Wayback Machine, looking for nostalgia.
In case you haven’t ever used it, the Wayback Machine is the archive of the internet. Head to web.archive.org and type in a website to see its old versions.
My personal favourite is Geocities. It was proof that the crowd definitely doesn’t have too much wisdom.
What quickly becomes apparent when looking at old websites is how the vast majority of estate agent websites look like they belong in the archives of the internet.
Considering how much time we spend online it seems incredible that estate agents invest so little in the online marketing or shop front.
This is one clear advantage the likes of Foxtons and online agents have over both independent agents across the country and the big corporate chains like Countrywide – one set genuinely invest in their websites. You can see the different iterations over the years.
With independent agents, you can see the same websites five and even ten years prior in some cases.
But there was something else that struck me while looking at websites of online/hybrid/new style agents: their fees have been subject to massive inflation.
While Purplebricks charge £849 for their base selling service (£1,199) in London, back in 2014 they were charging £599:
That’s a doubling of fees if you’re selling in London – they didn’t have different fees for London until the ‘Bruce brothers’ TV adverts started to appear.
If you think that’s inflationary, here’s a sampling of fees from others over the years:
Settled: Free (2014), £299 (2015), £399 (2016), £499 (2017)
easyProperty: £59.99 (2015), £475 (2016), £825 (2017)
Tepilo: Free (2013), £495 (2014), £495 (2017)
eMoov: £349 (2010), £295 (2012), £395 (2013), £595 (2015), £795 (2017)
How long will this trend continue? And at what point do online agents stop becoming all about fees?
Over the last year I’ve been using Monzo – a new online bank for my spending. And today I signed up for Starling Bank who have recently launched their current account.
It took me less than five minutes of security checks to receive an account number and sort code. Starling now have a video of me speaking to camera to help them verify who I am.
I went in to Santander recently. They knew who I was, but because I didn’t have ID on my person refused to serve me. It’s worth noting that it took them 17 days to open an account for me.
That’s 17 days of costs that Santander had to bear, just to take my money.
Most of the current crop of online agents do little more than list your property on Rightmove – that is after all their value proposition: get your property on Rightmove for less.
And that’s probably why we see a regular increase in fees: because Rightmove increase their fees to agents by approximately 20% per annum.
In contrast, the vast majority of independent and corporate chains operating on a commission basis have enough margin to conduct business without needing to take on endless amounts of investor capital.
You can guarantee Rightmove will increase their fees again this year. It’ll be interesting to see if online and hybrid agents are forced to follow suit.