LUVTHECITY INTERVIEW - 15.03.10
AS TESCO RE-ENTERS THE COMPETITIVE ONLINE PROPERTY MARKET, LUVTHECITY TALKS TO TEN INDUSTRY EXPERTS AND ASKS THEM HOW BRITAIN WILL BUY AND SELL PROPERTY IN FIVE YEARS' TIME
1. THE ENTREPRENEUR
Sarah Beeny, Owner, Tepilo
www.tepilo.com
So who do you think will be king of property in 2015?
Well obviously I’m going to say Tepilo, but I really think it will be. Well, Tepilo or a site similar to us. If I had shares in Rightmove, I’d be very worried right now.
So if Rightmove won’t dominate in 2015, what about another big player, say Google?
I’d be very surprised if Google did it themselves. I think Google definitely will enter the market, but more as a way to join up specialist sites, rather than just Google doing it alone. In the future, online companies will have to do more than just replicate a small ads site, people want their hands held and I don’t feel that a generic site like Google could do that. Otherwise we’ll be returning to the world of small ads in the back of newspapers.
So you think 2015 will be smaller players, rather than larger ones?
I do. It will be smaller players that know their market and that do it well. When I’m doing business I like to deal with companies that are in touch with their clients and know what they’re doing
Everyone appreciates that the next few years will see a seismic shift in the way people buy and sell property online, so why do you think Tepilo in particular has been so heavily criticised?
I don’t know – it’s funny that people have just criticised us rather than being constructive about how we can all work together. Some people have suggested that owners are at risk by selling their own properties and that people simply don’t understand the risks. One company suggested that owners may accidentally photograph a kitchen with their bank statements lying around – it’s nonsense really, like people are going to zoom in on photographs just to find out details of who lives there. I’ve lived my whole life going out the front door every day without somebody reminding me that I have to lock it on the way out. And anyway, how secure is the whole process of showing someone around your house anyway? Do estate agents do background checks on people they show houses to? No. At least online you have an an email address and a contact detail.
“I believe people need a clear voice
and I’m not sure Tesco has that
If you’re in the market for 2-for-1 bags of carrots
that’s fine, but property? I’m not convinced”
So do you think that all estate agents will need to change their business model in the next few years?
I do. I think the property market will go the same way as the travel agent market. A few years ago it was paper adverts in travel agents windows advertising cheap holidays. If you mention this to young people nowadays they’d just laugh. The travel industry has successfully reinvented itself and I think the property industry has to do exactly the same thing.
So, do you think estate agents will still be prominent in 2015?
Of course. There is always going to be room for good agents who know their market and who do their job well. I just don’t feel estate agents should have a complete monopoly.
If we’re talking about monopolies, do you think someone like Tesco will hold all the cards in 2015?
Well Tesco have recently re-entered the market, but it’s a funny business model, don’t you think? I believe people need a clear voice and I’m not sure Tesco has that. If you’re in the market for 2-for-1 bags of carrots, that’s fine, but property? I’m not convinced.
What about their website?
I think the key to being an online seller is getting the site right, and Tesco’s current one is not great. I’d say Tepilo’s is brilliant because we built it, but you do need to get this part right. Tesco are charging £999 and I think that’s quite a lot. I mean, why would you?
And with Tesco, do you think that brand image is a problem too?
Yes, maybe someone like Marks & Spencer would have a better chance
That’s true, especially if they were to enter the Home Counties market!
That’s right. I’d like consumers to have a choice and to have faith in the company they’re dealing with. Marks & Spencer could do this well.
So if 2015 will be more about smaller online sellers, how do you think current high street companies will fare?
Well I feel the internet is a real leveller in business, so if you understand your client then you’ll succeed selling property whether you’re a traditional agent or a new company like Tepilo
So it’s more about having empathy with your clients?
Absolutely, I really feel that whatever your company is, if you don’t put your consumer first, then you WILL fail.
2. THE JOURNALIST
Rosalind Renshaw, Editorial Director, Estate Agent Today
www.estateagenttoday.co.uk
Over the next five years, a battle will be fought between traditional high street estate agents and newer models. Both will become increasingly internet based, but the former will continue to have a physical presence, and will offer physical services, such as accompanied viewings and face to face valuations, advice and negotiations, and will employ increasingly professional members of staff – people who have passed exams and belong to a professional body, and who will also have to obey the full letter of the law when it comes to consumer protection, being truthful and having to belong to an ombudsman scheme.
But will consumers pay for this gold standard? Or will they opt for cheap (but maybe not so cheerful) online services which may do little more than provide a marketing service whilst sellers and buyers do all their own viewings and negotiation? And which, by the way, will be only very lightly regulated by the law (the OFT's own words).
Some of these cheaper services may not be just cheap – they may even be free, as per Sarah Beeny's website, Tepilo – or monetised in a different way. But how? And will the consumers know?
"People will be increasingly
be under pressure to decide
whether or not go down the DIY
home-selling route"
However, the real battle will go well beyond the legalities and will be all about disintermediation. Just as people decide whether they can do without lawyers (fight your own battles), architects (design it yourself), surveyors (measure it up yourself), they will be increasingly under pressure to decide whether or not go down the DIY, internet-enabled home-selling route."
It will be fought as to how well private sellers and buyers can deal directly with each other, and in particular how well they can handle the intricacies of holding together chains, gazumping, gazundering and the timetables imposed by lenders, surveyors and conveyancers – not to mention, people who simply change their mind.
"Such a battle is necessary
to expose the value of the service
that estate agents offer"
My suspicion and hope is that just such a battle is necessary in order to expose the value of the service that estate agents offer. Over the years, the industry has cleaned up its act. Personally, I would never want to handle the sale or purchase of a property, and I would certainly expect a high level of service, for which I would positively want to pay, to incentivise that service. After all, why save an average of £1,500 estate agency fees when you might get an extra £10,000 on the price someone else could negotiate for you, Also, I have never understood why consumers understand that they must pay legal fees but not estate agency fees. Can online services replicate this estate agency model?
However, as a property editor in the 'trade' sector, I may be too close to the industry, and no doubt, over the next five years, others will decide its direction
3. THE SOCIAL NETWORKER
Duncan Dunlop, Managing Director, Oodle
www.oodle.co.uk
Social media, aka Facebook, lends itself perfectly to the rental market, the ability to find flatmates through friends and check the credentials of landlords adds real value and simplifies the whole process of renting a property. The Property sector is more difficult to predict, for sale by owner will grow with people using sites like Estate Create to build websites to market their own properties. There will also be complete transparency with regard the effectiveness of Estate Agents as data surrounding their transactions becomes more transparent enabling consumers to make more informed decisions about whom to choose to sell their property. This data sharing will be facilitated by Facebook where consumers can easily ask their friends and contacts about who they would recommend.
4. THE INVESTOR
Daniel Latto, Director, The Think Tank Group
www.thethinktankgroup.co.uk
The future of online property is likely to be vastly different from today. Bandwidth availablity will explode and with that comes rich media content. Virtual tours and video presentations will be common and there'll be voiceovers giving additional information. There will be increased access from mobile devices, similar to what we have now with the iPhone, but with a few extra touches, more power and more usability. Broadband speeds above 100MB will ensure that data can be easily retrieved from devices across the world - Skype will go mobile.
“The internet will change
more in the next 5 years
than it has done
over the last 5 years”
Newspaper revenues are down, due to property advertising moving onto the internet, whilst there be more property portals coming into the market, all battling for supremacy.Social Media will also play a part - up-to-the minute content will be indexed by the search engines in 'real time', meaning that if a new property comes available, it will be searchable online instantly, with video walk-throughs also being available.
Could you just imagine having your property displayed on the actual ‘For sale’ board, with video, voiceovers and price details? All you'd have to do is press a button on your mobile phone and book a viewing!
5. THE ESTATE AGENT
Angus Edy, Director, Movello
www.movello.com
In my view the main high street brand names will not have changed much by 2015, you will still have the major players such as Savills and Knight Frank at the upper end of the market and Bairstow Eves and Your Move at the lower end. There will also still be strong regional and local players such as Foxtons, although the level of debt this business has been saddled with may get the better of it. The people who own these brands may change and they will all adapt their business models to harness the change that will be brought about by the internet. I agree with Sarah Beeny's assumption that Estate Agency will go the same way as Travel Agency. All agents need to adapt, as travel agents have done, but people still use travel agents, albeit in a different way. But I don't agree that social media will dramatically change the way we buy or rent property. Yes, people will get opinions from their friends and yes, review sites will also influence people's decisions, but for me social media is about making the world a smaller place where you can maintain communication with your friends.
"I don't agree that social media
will dramatically change the way
we buy or rent property
over the last 5 years”
On a local level we are going to see a rise in the use of location based services such as Foursquare where people can communicate and interact with people and places in their local area. This may adapt to include businesses such as estate agents.
I think Rightmove will still have a strong presence in 2015 but will be joined by the likes of Google, ISold and Zoopla. The problem all of these portals have is the quality and recency of the information provided by them. ISold and for sale by owner sites like Tepilo are limited by the fact that they only provide a small snapshot of the market. All the portals that takes feeds from estate agents are limited by the quality of the data entered by the agents.
"Those that fail to adapt
are going to be left behind"
All the portals have had problems with rogue agents (and lazy agents) leaving sold and let properties on the site to generate leads that can be converted into other properties. The quality agents that always update their availability have suffered from a lack of leads because they have not been advertising enough properties to get noticed. For Movello, we will be adapting our marketing to include new forms of advertising such as Bluetooth marketing, tightly focused Google adword campaigns and search engine optimisation. A company's website is going to become the main shopfront for most businesses. Those that fail to adapt are going to be left behind.
6. THE SEO EXPERT
Darren Earney, Sales Director, WebCreationUK
www.webcreationuk.com
Over the next few years, launching a new property site into a crowded marketplace, especially against the backdrop of a turbulent economic environment, requires great design but also great marketing. A well-designed site will be built around ‘converting’ consumers - that is, actively engaging users to utilise the site functions and services. Once this hard work is done the next challenge is driving visitors to the site.
Intrinsic to the successful launch of a Property Portal are the methods of site promotion covered by the terms Search Engine Optimisation (SEO) and the recently coined Social Media Optimisation (SMO). Both methods are concerned with increasing the visibility of the portal either on the major Search Engines such as Google and Bing (SEO) or on the burgeoning social network websites such as Twitter and Facebook (SMO.
"It is still necessary for innovative
approaches to be matched by an equally
adventurous traditional media campaign"
These areas are influenced by on-site factors such as the text content of the site and off-site factors which covers the links which point through to the site. The growing field of SMO offers not only the prospect of an increased volume of visitors but also the ability to engage these users in an on-going relationship through regular updates and incentives. This offers the prospect of stronger loyalty and brand awareness for relatively little effort compared to a traditional media campaign. However, it is still necessary that innovative approaches to the property market pioneered by sites such as Tepilo.com and Luvthecity.com need to be matched by an equally adventurous media campaign, covering both traditional SEO and SMO.
7. THE BLOGGER
Carolyn Hughes, Manchester is Ace
www.manchesterisace.co.uk
I edited a property magazine for four years, but over the past few years so much has changed - I now blog about food, art and culture instead. Property publishing is pretty dead now everything is on the internet. It's the first place I go if I want to look at property and I can even check my email on the bus or in the bath! But I think there will be some interesting developments with mobile phone apps - Rightmove already has an iPhone application and this type of technology is likely to revolutionise the way we search for property.
"I don't think people buy their local papers
to look at property adverts anymore"
I had heard of various mobile technologies a couple of years ago where you could text a number from a 'for sale' sign and have the property details texted to you. I think it was too early for this kind of technologies, but mobile smart phones are moving forward at a really quick pace. Just like people have stopped picking up brochures from estate agents, I don't think people really buy their local papers anymore to look at property adverts, when everything is already on the internet. As far as I can see the recession hasn't stopped people wanting to move or buy property - almost everyone I know is looking to move at the moment, so we'll see what happens.
8. THE ECO ARCHITECT
Giles Ings, Director, ABIR Architects
www.abirarchitects.co.uk
The internet has brought us to a turning point where purchasers are now judging a building on its online green credentials, rather than what they see in a developer’s glossy brochure. Consumers are more aware than ever before of what lies ahead in terms of global warming, global economy and the effects on domestic fuel prices.
At the moment HIPs give simple energy usage ratings, but in five years time it could all change; online brochures could predict a building’s future energy and maintenance costs and energy rating symbols will take prominence in estate agents windows.
But will this information really make a difference to how people buy and sell property? Maybe not in the very near future, we’re all in for a huge shock as energy prices will keep rising, year-on-year. Electricity companies are starting to pay customers for the energy they create from a range of innovative schemes, such as photovoltaic roof panels and by 2015 Community Power Generation schemes used successfully in Sweden will become the norm in future developments. For the first time we’ll all have the chance to take a share of the economic benefits.
"The traditional developer’s days are numbered
if they haven’t invested in sustainability already
then they’ve missed the boat"
Recently I chaired a design panel review where we looked at two new housing schemes by two very different developers. The first embraced green credentials by putting people before the car, whilst the second ignored every current trend in sustainability with long winding tarmac roads and wide double garages. It ignored everything our children are taught in their school Eco Clubs and everything they read online. We asked the developers how they would market their product against more contemporary schemes and their reply was glib, to say the least; “The public aren’t clever enough to know the difference’. How wrong could they be?
Any developer or estate agent that ignores green issues will pay in the long term. The public are informed and we’ve the internet to thank for that. It has revolutionised public perception of green issues and I expect the next five years to be even more dramatic. When our children buy property, they’ll see beyond the printed glossy brochures – the internet will tell them if the house they want to buy is green or not.
The traditional developer’s days are numbered; if they haven’t invested in sustainability already then they’ve missed the boat.
9. THE SOFTWARE CREATOR
Martin Smith, Director, PropertyAdd
www.propertyadd.com
I see two key areas for real innovation by 2015; the use of mobile internet and the recognition of the need for more measurable communication along the supply chain, both with vendors and an increased use of online conveyancing.
Tablet PCs (such as the iPad) have the potential to improve valuations – both in terms of interactive presentations (mapped comparables, actual applicant match numbers, etc.) and in time savings on recording particulars and generating floor plans, etc.
At the start of 2010 I was suggesting that estate agents shouldn’t worry about mobile internet, but by 2015, that will definitely have changed. The number of people with mobile internet access is growing exponentially and are likely to represent a significant percentage of the market.
Review sites have been some of the most successful uses of the internet over the past decade, particularly in travel. I see this becoming increasingly important for estate agents as sites like AllAgents.co.uk become more popular. Public feedback and reviews of property listings would be interesting to see, but would perhaps be too much of a legal minefield!
"The biggest change has happened in the last week
– the nationwide roll-out of Google Street View "
If we look back to 2005, very little has actually changed and I think that pattern is fairly typical of industries dominated by small independent firms. Actually, one of the biggest changes has probably happened in the last week – the nationwide roll-out of Google Street View. I see that as a bit of a game-changer. The other big one has probably been public access to historical price information.
My feeling for the next five years is that we should probably only expect incremental improvements in the majority of today’s hot topics (social media, video, portals, information availability, etc.), with some headway on one or two new innovations, probably led by intelligent search.
The next generation of estate agent managers coming through the ranks will inevitably help to push technology, but even basic improvements such as a timely response to email still has room to make an impact at many agents.
"I see the private seller market growing
and as consequence I see a boost in the
number of buyer’s agents"
The big change I foresee is the complete acceptance of the online agency model, both as part of a natural evolution and as a direct consequence of economic circumstances. There has definitely been an accelerated public understanding of fixed fee agency models over the last year or two and the growth of personal agent franchises and the launch of iSold will boost that. An increasingly savvy generation of home buyers will certainly continue to expect more in the way of out-of-hours updates via access to vendor login areas.
I also see the private seller market growing, though still ultimately only be responsible for a minority percentage of sales. As a natural consequence of that, I see a boost in the number of buyer’s agents.
If I had to predict who will be king of property in 2015 I'd say that the big boys of today will be the big boys of tomorrow: Rightmove, Zoopla, DPG and Google.
10. THE MARKETEER
Phil Shankland, Managing Director, Inspiral
www.inspiral.biz
By 2015 I see four currents converging to create the 'Perfect Storm' in the online property market...
1. What Buyers and Sellers Do The internet is the perfect platform for disintermediation, in simple terms - cutting out the middle man. You can rent or sell your house on Craigslist, Tepilo and Gumtree, and only the intermediaries that add real value will thrive, such as Zoopla and Luvthecity. I fully expect alternative sources of mortgages to arise too, maybe crowd-sourced morgages along the lines of Zopa.
2. What The Trade Does Vebra is the leading provider of marketing services to property professionals. Most estate agents websites use them. They also happen to be owned by Guardian Media Group who have recently opened up their published content to third-party application developers
3. What The Open Source Data Movement Does If Ordnance Survey and Companies House data becomes accessible so might Land Registry data
4. What Google Does They've already photographed your front door for Street View, so why not merge that data with a third party publisher of property for sale?
It will take several years for this property tsunami to hit - but when it does, both buyers and sellers will benefit
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EDITORIAL COMMENT
Julian Bovis, Director, Luvthecity
www.luvthecity.com
Sometimes I think technology is developing too quickly, I worry there's too much generic information and it's crying out to be filtered. Mobile browsing is fine, but you can’t beat sitting at your computer for hours on end with a cup of tea and a chocolate biscuit. This may seem a luddite way to surf the net, but when you’re looking for somewhere to live you want more than 20 words and a thumbnail picture.
There’s a lot to be said for better-quality information, filtered by people who know what they're talking about and then served-up with care and attention. The problem with sites like Globrix is that despite their innovative technology, they are so huge and anonymous that users don’t feel connected. And when this happens, you might as well give up and go home.
"I’m amazed how rubbish most online
property photos still are ... you see better-quality
pictures of underwear on eBay"
For all our current obsessions with iPhones, Twittering and Bluetooth technology, we must remember that searching for property is still about making the most expensive purchase you’ll ever make and it’s rarely done by people under the age of 25. And by the time you’re that age, your social life has gone and you’re sitting at your computer with hours to spare (probably like you are reading this!).
Maybe I’m an old git, but I think the future is about the quality of information, rather than how we actually get it. In the days of cheap 10MB cameras I’m amazed how rubbish most online property photos still are. You’re selling your greatest-ever asset and you see better-quality photos of peoples underwear on eBay.
"The future of online property
is about the quality of information
rather than how we actually get it"
In such a competitive market only the strong will succeed, so if I had to predict the market in 2015 I’d say there will be only two survivors; high-quality estate agents who care about their clients and niche websites where private sellers can advertise properties with the time, dedication and passion that selling a house requires. Or a combination of the two. The future is not about information overload, it’s about improving relationships between buyers and sellers, whether that’s privately, through an agent, or on a social-networking site.