Weekly News Roundup – 03/05/24
A roundup of the week’s top property and proptech news stories in partnership with Proptech-X
Is Zoopla holding back the housing market?
Maybe it is me! and definitely me and my dog Zara do not think like most people, but – each month in the UK just 100,000 properties complete (exchange) and in the past decade this has been the norm (apart from distortions caused by Rishi Sunak the SDLT giveaway as Chancellor).
Curiously though the population has been growing too, by over 2,400,000 in the ten-years since 2014, and with over 2,200,00 new homes have been built and sold, swelling the inventory available, the big question is why are there not more houses being bought and sold?
The mystery deepens if you look back in time, as in 1988, when the population of the UK was just 57M, 10M less than today, there were over 166,000 properties a month exchanging and completing. A whopping 60% higher rate of movement in the housing market than in 2024, and with a significantly smaller population.
If 1988, saw 2,140,000 homes exchanging, and 2024 is likely to see only 1,100,000 homes exchanging then there is definitely something wrong with this equation and these figures. Add in that since 1988 when the UK like the rest of the world was running its property industry on paper and analogue systems, decades before cloud computing or the recent Tsunami of AI based technologies – it would seem strange that the volume of buying and selling property in the residential sector seems is stagnant or going backwards in real terms.
Which brings us to property portals, the digital advertising for property in the UK (and across the world). When we saw the biggest amount of exchanges in this country in 1988, Rightmove was still 12-years from being born so it definitely was not speeding that plough. And if you scratch the surface and get under the hype of what portals ‘do’ for agents, well it may surprise you. (Photograph of Andrew Stanton when he was still an estate agent).
Metrics are a funny thing, the big three property portals have over 70M visits a month, and regularly remind their licence paying agents of this, but why with all of these eyes being drawn to the property portals is this not translating into a huge payday for agents, as stubbornly the housing marketplace shows no uptick in sales.
Putting it another way, if agents using biros and paper, without mobile and CRMs, and conveyancers running their businesses on golf ball typewriters and filing cabinets, could get over two million people moved in the year 1988, what number of ‘extra’ sales would have happened if property portals existed and there was all the technological advantage of modern commerce available today.
Would three million people have moved home? My thoughts no; so if portals generate great viewing figures but do not actually create more business, why do they charge agents such a high fee. The inspiration for this thought piece was reading a Linkedin message from Charlie Bryant CEO of Houseful, the brand that has amongst other companies inside it Zoopla. I like Charlie and have the upmost respect for him, but it got me thinking.
Charlie posted, ‘I’m very proud of the fact that 94% of consumers know Zoopla (part of Houseful)… but this week, I was told a fact that really hits home. Someone downloads the Zoopla app every 15 seconds. That’s 8 downloads in the time it takes to microwave your porridge every morning.
But that’s not all. Over the past six months, the app has delivered:
🪧 3 for-sale leads every minute
🏡 4-and-a-half rental leads every minute
✍️ And, it’s the most-reviewed property app in the UK
We’re only just getting started, with more launching in the coming weeks, including our brand new marketing campaign….”
Whilst I love porridge and I think my dog Zara would too given half a chance, I am not too convinced that property portals in their present state are ‘powering’ the agency businesses of agents, and whilst I am aware that portals have thousands of other clients who are not agents, it is the revenue from phalanx of agents that provides the ever increasing cash that fills the huge coffers of these large proptech beasts.
Maybe it is time for a re-think on what they should really be doing for agents, rather than hyping the vanity metrics which do not seem to translate into extra sales or extra bottom line profits for agents.
Article by Andrew Stanton with additional material from Zara Stanton.
Will Yardi’s multi-million gamble on WeWork the former £37Bn Unicorn pay off?
The word is that Adam Neumann the enfante terrible and former co-founder is unlikely to be the new owner of WeWork as it emerges out of the gloom of its present bankrupt state. Yardi now looks well positioned to become a majority shareholder of the company with a new 60% stake, shored up by an injection of £269m together with capital injected by other parties.
If this restructuring is waived through in late May Softbank would look to hold over 15% of the equity of the phoenix company. But the bigger question I feel is – in a different time and place WeWork was a £37Bn Unicorn, at a time that many companies had hyper-inflated ticket prices.
In some ways Yardi is in so deep that following through with this deal is better than any alternative plan, but there is still a huge mess with regard to landlord liabilities and perhaps more crucially has the world spun on, and is work itself still morphing into a more liquid asset type?
Everyone has to work, but is the WeWork model going to in the next decade be the de facto operating model? I have my doubts, but by June 2024, many stakeholders are going to be pulling out all the stops to ensure it just might be.
Nimbus report gives oversight on retail market post Covid
THE impact of COVID-19 is still being felt on the high street four years on from the first lockdowns, with ongoing implications for retail real estate, as we saw several years’ progress accelerated into just one. However, with challenges come opportunities – which are revealed in the latest industry report from leading property intelligence platform Nimbus®.
Post-Covid, businesses have had to adapt and change the profile of retail footprints, with many taking smaller units in town centres, and larger ones in out-of-town retail parks. For those that haven’t changed their offering, there have been a raft of closures and administrations – with Wilko and The Body Shop being two of the biggest names of late.
The “Retail – State of the Market Update” report – which is the result of collaborative efforts with a range of property and retail experts – casts a spotlight on the changes happening across a rapidly-evolving landscape. This includes how the introduction of Class E has allowed uses to move back into the high street that had otherwise been driven out by national retailers paying higher rents on strong covenants.
Paul Davis, (Pictured above) co-founder at Nimbus®, said: “There are a number of areas in the market – like food retail – that continue to boom. In the case of drive thrus and roadside retail, we have seen strong competition for sites, that has also driven land values up to record levels. Naturally, the evolving market means that not every impact or route forward for the retail estate market is completely clear cut, but there certainly are opportunities.”
“Class E’s introduction is returning uses historically removed from the high street – like doctors, dentists, and nurseries – and creating the opportunity for town centres to become more community-focused once again. Meanwhile, there is also opportunity in the right places for the right buildings to see elements – usually uppers – repurposed into residential where it is viable.”
Nimbus’ report details an increase in councils looking to create mixed-use developments in their own high streets, where in some cases local councils have acquired their local centres and are progressing schemes through joint ventures with the private sector, which creates the question of what order various elements should come forward and how this impacts overall values.
Andrew Stanton Executive Editor – moving property and proptech forward. PropTech-X
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