UK government keen to encourage online estate agents

Photo:   EEPaul

The UK government has said that it is keen to encourage the rise of online-only estate agents in a statement that will come as a blow to the high street.

A document detailing plans to boost competition in the UK to bring down bills for families includes a section dedicated to “injecting innovation into the process of home buying”, which highlights the importance of quicker, simpler and cheaper ways to buy and sell property.

Chancellor George Osborne’s intention is for the Government to “further reduce barriers so that it’s easier for alternative business structures, such as supermarkets and estate agents, to offer legal services such as conveyancing”.

“Encouraging new business models (for example, online only estate agents) is key to enhancing price competition in the real sector, but these have yet to penetrate the market,” says the document.

It also highlights research that has found that consumers incur costs of around £270 million each year when transactions fall through. Similar issues can affect businesses trying to buy or sell commercial property – the UK ranks 45th for registering property in the World Bank’s Doing Business index, and improving performance will help unlock additional economic growth, notes the document.

“The government wants to consider and address the way the real estate and conveyancing markets have developed around the existing regulatory frameworks, encourage greater innovation in the conveyancing sector and make the legal process more transparent and efficient,” it adds.

The government will launch a consultation in spring 2016 to discuss possible solutions.

Founder and CEO of online estate agency, Russell Quirk, welcomes the move as a “significant nod to the success of the online property sector” and how it has evolved in recent years.

“We’ve known for a long time that we offer a vastly superior service for a fraction of the cost of the high street. If you ask me we have most definitely penetrated the market already and have been injecting innovation for quite some time now. However I understand that the Government can’t base its plans on a whim and so having now had enough time to evaluate the results, their latest intention shows that they, like us, are clearly consumer centric when it comes to the property selling process.”

“By improving the legal process and reducing the barriers involved in aspects of the property process such as conveyancing, the Government should hopefully help us streamline the process of buying or selling a property even further. This will make it easier for companies like eMoov to offer legal services and will hopefully result in yet more value added for the consumer, as well as a more fluent process overall.”

Mark Hayward, Managing Director of the National Association of Estate Agents, told Property Industry Eye that innovation and competition is a good thing, but that the high street still has a role to play.

“Many high street agents have very strong online presence and work in tandem with estate agency portals. High street agents have networks of contacts who are searching for property and offer a variety of different techniques and channels,” he said.

“High street agents understand local markets and will advise on the right tools for individual clients. While strong online presence is essential, it is most effective when teamed with expertise and local knowledge.”