When RightMove became the first port of call for property buyers in the mid-2000s many predicted that local estate agents would no longer be needed.
The days of traipsing down the high street to peer through estate agent shop windows to browse the latest properties were long gone, and having a single website to view pretty much every available home, complete with email alerts, had its obvious benefits.
The arrival of online estate agents with low fees, like Purplebricks, which launched eight years ago, was thought by many to be another nail in the coffin.
“How much longer can traditional estate and lettings agents survive?” asked a national Guardian newspaper headline in 2014.
The following year Purplebricks floated on the stock exchange with a valuation of over £240 million.
“Given that the vast majority of property searches take place on the internet, a business that provides a ‘virtual’ offering without expensive high street offices can significantly undercut the current market,” said fund manager Neil Woodford at the time.
Since then Purplebricks has collapsed in value (as has the reputation of Woodford, following the catastrophic failure of Woodford Investment Management). Its latest trading update suggested it may soon run out of cash.
And while Rightmove remains as popular as ever, local estate agents remain resilient to digital disruption.
The reason why lies in the fact that they do more than just match buyers with sellers in the most efficient way possible.
“Estate agents perform a two-way function which Rightmove does not. Rightmove merely asks buyers ‘What do you think you want’? Estate agents also ask a second question: ‘Who could be persuaded to buy what we have to sell? This second question is important for a simple reason. We think we know what we want but we don’t,” observes Rory Sutherland.
“Interestingly I have been told that most people arrive at an Estate Agent’s with a clear-cut list of essential attributes for the home they want – but then go on to buy something which meets very few of them. People don’t know what they want until they’ve seen it, at which point their once “non-negotiable” preferences change completely.
“Because we think we know what we want, we think Rightmove is an optimal way to find a home.
“Actually it really isn’t, since we never end up seeing the things we never knew we wanted. Or searching for properties in places we’ve never heard of.”
