For an industry already in difficulty it’s bad news. If you’re selling a house, it’s great news. And for investors it presents a one-off opportunity.
Let me explain… The Office for Fair Trading (OFT) wants to loosen the traditional estate agents stranglehold on the UK property market. They want to get rid of legislation that has protected the industry from competition. For estate agents the OFT’s timing could hardly be worse. It’s been a torrid couple of years. With transaction volumes way down, agencies have been shutting at a rate of 150 per week. The only bright spot has been the success of the agents’ website – Rightmove. The Rightmove website is widely used and shows about 90% of houses for sale in the UK. But now Rightmove is itself under threat…
The OFT wants new competition and it wants it to come through the internet. Effectively they want rivals to take on Rightmoves’ near monopoly position. This is where the likes of Google and Tesco come in. The internet has transformed industries already Just look at what happened when Amazon entered the book industry. Amazon has decimated high street book sales. Stores have been disappearing to the extent that today, they only account for about half of book sales. And books are products people like to thumb through and browse before they buy.
If the internet can transform book retailing –– just imagine what it can do to house sales. After all, agents really only provide ‘details’ on houses for sale. This information can be delivered more easily and in a far richer format online. Google already has local area images (Google Earth), details of schools, shops, takeaways, etc – frankly as much information as you could possibly want to help you choose where to buy. Changes could come sooner than you think Both Tesco and Google have powerful brands and either of them could launch something really quite sensational. Google is said to be working on plans for an online assault and “is expected to launch as soon as this year” according to The Times.
turtlehomes.co.uk are UK low fee online estate agents