The advent of online estate agents has been a hot topic in the property industry for some time now, with many predicting a marked rise in the market share of this group of businesses to come in the near future. However, with many buyers and sellers still showing a distinct preference for high street agents, it remains to be seen whether online agents really will take over from more traditional agencies anytime soon.
In the latest edition of the TwentyCi Property & Homemover Report, looking specifically at Q3 2019, TwentyCi revealed the true picture for online and high street agents in today’s market. The report gives us an in-depth analysis of market share and the factors that impact it, looking at factors such as location, pricing and regional differences.
Location still matters
We can’t talk about the property market without mentioning location - and the same applies to any discussion of the market share of agents. Location is a hugely important factor in determining the popularity of online vs high street agents, and the latest research reveals a considerable difference in the take up of online agents in various regions around the UK.
Whilst high street agents remain the giants of the market throughout the country, it’s possible to narrow down the regions in which online agents have seen the biggest growth. In Scotland, more people used online agents than ever before during the third quarter of 2019. This was closely followed by the North East of England. These findings support the idea that those most likely to use an online agent are those selling a more economical, affordable property. Regions where property prices are higher, such as the South West and East of England, are the areas where traditional high street agents have retained their market share.
Pricing remains integral to agents’ market share
The pricing of properties has remained a determining factor in the market share of online and high street agents. When looking at property prices in isolation, we can see that the growth for online agents is highest in properties valued below £200,000.
For properties priced over £350,000, the market share of online agents declined over this period. These findings are consistent with the regional figures, giving a clear picture which suggests that customers are opting for online agents when selling a more affordable property, and choosing to stick with traditional high street companies to sell higher-priced homes.
Transactions by online agents continue to correspond to more economical properties. The average listing value of properties advertised by these agents dropped 2.39% year on year. For high street agents, the asking prices commanded continue to be higher than those of online agents. However, the average asking prices of high street agents also dropped slightly when compared to the figures from the same quarter last year.
Exchanges: How did Q3 stack up?
Of course, the most important figures to examine when discussing the market share of agents relate to exchanges. For this quarter, the market share of online agents remained steady at 7.9% overall, with 20,192 successful exchanges by online agents in Q3 2019. This figure has been largely unchanged for the past three quarters, according to research by TwentyCi. For high street agents, market penetration remains at 92.1%, with 235,246 exchanges completed by these businesses in the last quarter.
The figures from Q3 2019 show that high street agents continue to command the lion’s share of the market. Particularly popular for higher priced properties, or properties in more expensive regions, high street agents remain a trusted and credible way to buy and sell property.
In the current climate, increasingly hesitant homeowners are less likely to try something new and opt for an online agent. However, online agents are still seeing some growth in particular regions of the UK, such as Scotland and the North West. Find out more about the market share of online vs high street agents in TwentyEA’s highlights of the latest Property & Homemover Report.