This week’s big news where high street estate agency is concerned has been Countrywide’s announcement that, due to the ongoing restructuring of the business, a number of their senior management team will be given the axe.
The UK’s largest estate agency has been undergoing a substantial change since the appointment of new Chief Executive Alison Platt. Platt highlighted the online proposition as part of her focus on being brought into the business and it would seem this latest announcement is a step further towards the online sector for Countrywide.
The online model is far leaner than that of a high street branch and as a result, the operating costs are substantially less, resulting in a fairer fee for UK sellers. This latest move by Countrywide appears to be an attempt to re-align their business model with an eye on becoming a more streamlined business.
Despite the traditional estate agency sector previously dismissing the threat of the online model as a non-entity, it would seem the high street is now starting to hurt.
In august Barclays warned that online estate agents are more than credible competitors in the space and a real threat to agents such as Countrywide and Foxtons.
Jon Bell, of Barclays, said “Foxtons has an unstinting belief that its fees – likely to be the highest in the market – are supported by a premium service that delivers superior net returns for its customers. Our view is that online agents could start to demonstrate that they can deliver equivalent returns. We believe that new entrants will drive commission rates down in time, and that this will have repercussions for Foxtons”
It would seem these repercussions are already hitting home. Foxtons, who launched in 2013, have seen their stock price plummet since the start of last year. In February 2014, they were trading at £3.98 per a share. Although they have seen a slight rejuvenation since the end of 2014 their share price has only climbed back to £2.38, a -38% drop on their peak of nearly £4. With the news this week, Countrywide and Winkworth’s have both seen their share price drop.
My heart goes out to those in the firing line at Countrywide although Alison Platt tweeted to say they had new roles, so hopefully not everyone will be put out of work. However should they feel a change of scenery, eMoov are always on the lookout for top-notch industry professionals. Our growth has allowed us to hire experts in product, development, media, finance and marketing from a variety of sectors over the course of the last year.
In battle there is always casualties. In the race to deliver a great service, at a great value, consistently on a nationwide scale, we all know how this ends. Online wins.