BREAKING NEWS – top 5 stories 12/07/2021
Daily bite-sized proptech and real estate news in partnership with Proptech-X. Today, Stanton looks at YOPA, Savills, Government Figures and More
- Strike Freemium Online Agent Employs New Chief Technical Officer Dan Rafferty
- Yopa Hires Simon Elliott To Train And Develop Team
- Savills Employee In Alledged Twitter Racist Abuse
- Despite Pandemic Gloom Housebuilding Is A Growth Sector In June
- Latest Government Figures Show That Nearly Eight Out Of Ten Tenants Are Happy
STRIKE FREEMIUM ONLINE AGENT EMPLOYS NEW CHIEF TECHNICAL OFFICER DAN RAFFERTY
In an effort to actually get some traction, the very northernly entrenched, Freemium, online agency Strike has hired Dan Rafferty as their CTO, to beef things up, good luck I say.
Strike only completes on 3,214 properties a year, out of the 1.2M properties that complete annually. Strike has been around since 2007, formerly branded Housesimple, and in 14 years they have only ‘helped’ 45,000 people to move.
So in 14-years, there have been 16.8M completed sales in the UK, Strike has had only 45,000 of that pie. Bearing in mind they offer a freemium model now; this is a business going nowhere.
In comparison a traditional one branch agency completes on 140 sales a year, and they charge proper fees, so Strike would only need to have 27 traditional offices to be completing on 3,214 sales.
A cold start branch, needs 165K of seed capital, in year two breaks even, paying all that seed capital back and in year three makes 80k profit, by year five making a 250k profit.
27 branches, as cold starts in 2007, would be £4.45M of seed capital, 2009 all capital repaid, by 2013 investors would be making 27 x £250,000 gross profit, 6.75M. In the next 8 years even allowing for underperforming branches the cumulative gross profit, would be say £5M x 8, let’s call it £40M plus of profit.
Instead, tens of millions have been poured in, another £11M being wasted, give me a call, and lets use that 11M to cold start 65 branches tomorrow, and all investors in 36-months would have their capital back and maybe some profit.
There is a lot of snake oil and emperors’ clothes going on – with SaaS as the new Messiah, I know a thing or two about that as well, so maybe 30 branches and the rest of the cash into the new model of agency we are on the cusp of.
Then again I may be wrong I was only an estate agent for 32-years worked for the two largest corporates in the UK and myself, and dealt with 18,000 properties in that time.
And on the proptech front I have met over 400 founders, discussed their services, had 67 proptech clients last year, seen one of my first clients exit at multi-millions, have two Proptechs we are
looking to sell £30M plus, and we advised 20 real estate corporations last year also.
YOPA HIRES SIMON ELLIOTT TO TRAIN AND DEVELOP TEAM
Simon Elliott veteran agent, latterly at Haart has now turned up at Yopa the online agency. For me this seems a strange career move as Yopa; seems to have lost its way a long time ago. Having had millions of investment, it looks like they are going to need some more to keep them propped up with expensive new hires.
Why is it that the estate agency model is, start up, breakeven year two and make profit?
And the online model is get more and more rounds of multi-million-pound investment, so you can ‘disrupt’ the market (only disruption being investors bank balances) and then keep hiring ‘big names’ from analogue agents who are long in the tooth, with only the slightest knowledge of the 2030 digital natives who will be doing property.
It is like asking Mr Ford to design a Tesla car, for sure he would think having four wheels and a big engine was the right model, but maybe the ‘client’ might think twice if they were asked to ‘drive’ a model T Ford, when space travel for the rich is of the moment.
Does it impress the client that Yopa has some big analogue agency gun coming? No they want a great level of service, as yet Yopa have delivered mid league disappointment, and that is in the shrinking league of onliners.
SAVILLS EMPLOYEE IN ALLEDGED TWITTER RACIST ABUSE
Though Savills has stated, ’Savills is committed to eliminating discrimination and encouraging diversity amongst our work force. A full investigation will be carried out in regards to this unacceptable incident.’
It would appear that following England’s heroic showing at least one estate agent decided to vent their frustration in a completely unacceptable way, via twitter.
Given that another Essex based estate agent recently, allegedly man handled Chriss Whitty, are we now seeing the rise of ‘thugs’ rather than property professionals amongst the rank and file of the real estate industry in the UK?
DESPITE PANDEMIC GLOOM HOUSEBUILDING IS A GROWTH SECTOR IN JUNE
Industry analysis shows that June 2021, was the highest amount of new build activity since 2003, and the market seems to be in extremely robust health, despite materials and labour shortages.
LATEST GOVERNMENT FIGURES SHOW THAT NEARLY EIGHT OUT OF TEN TENANTS ARE HAPPY
Analysis from the English Housing Survey, produced by the government for the period 2019 to 2200, shows that 79% of renters were happy with the service that letting agents provided them. This was six percent less than if the tenants dealt with the landlord direct.
If you have a view – please let us all know by emailing me at [email protected] – Andrew Stanton Executive Editor – moving property and proptech forward.