WEEKLY NEWS ROUNDUP – 18/02/2022
A roundup of the week’s top property and proptech news stories in partnership with Proptech-X
- The Guild to host an in-person innovation, acceleration and growth conference this year
- Will Purplebricks delist from AIM and go private again?
- Is the Mulbury Homes collapse the tip of the new homes iceberg?
- £29m Fine & Country listing available as the real thing or NFT
The Guild to host an in-person innovation, acceleration and growth conference this year
For the first time in two years, The Guild of Property Professionals will be holding its Annual Conference and Awards Ceremony in person. Holding its last conference virtually, The Guild will be back at the QEII Centre in Westminster, London on 10 March 2022.
The Guild of Property Professionals is a network of 800 of the best independent estate agents from across the UK. The Guild is a sign of professional excellence that agents can use to differentiate themselves from their competitors and assure clients that they will act with knowledge and integrity to achieve results, the core values of The Guild. To enable agents to perform a superior service, The Guild offers marketing, business and technology services to its members.
Iain McKenzie, CEO of The Guild of Property Professionals, says that a lot has happened in both the sector and the world over the past year, so the Annual Conference, which is titled ‘Innovation. Acceleration. Growth’, will be a great opportunity to both reflect and recognise the amazing accomplishments that many of the Members have achieved during 2021.
McKenzie said: “While we have held regional meetings with our Members throughout the UK, the upcoming conference will be the first time the entire network will have been able to get together and celebrate since the start of the pandemic. Many of our Members have excelled and achieved some incredible results during 2021, so being able to acknowledge that as a network in person will be special. We are looking forward to the 10th of March and welcoming our award-winning network back into the same room.”
The Annual Conference will provide Members with the opportunity to network and hear from some amazing industry professionals and keynote speakers.
“We have a selection of exceptional speakers and industry experts, who will be providing our Members with valuable insight regarding the economy and what to expect in 2022. We will have a masterclass panel discussion on the tools and services that agents can use to drive their business forward, talks on how agents can win instructions the green way, and the trends and innovations we are seeing within the sales and lettings sectors,” says McKenzie.
With keynote speakers Katie King, Author and Management Consultant, and Debra Searle MVO, MBE, ranked No.3 in World’s Top Motivational Speakers in 2021. Debra is a professional adventurer, and serial entrepreneur, who rowed the Atlantic solo. Not only have her expeditions taken her across the Atlantic, but around Antarctica, up to the Arctic Circle and everywhere in between. She has also launched five companies, has presented for the BBC and is a trusted corporate speaker. Debra will be talking at the conference about the importance of choosing your attitude, no matter the obstacles.
“In the evening we will be presenting the Guild Awards, which are sponsored by The Telegraph. This gives us an opportunity to recognise and honour agents who have gone above and beyond for their clients and the industry in 2021,” McKenzie concludes.
For more information about the Guild Conference or to book tickets click here.
Will Purplebricks delist from AIM and go private again?
Though Purplebricks is awash with cash at the bank, and in no way has any financial difficulties due to its cash upfront sell or do not sell model, its low share price on the AIM, a section of the LSE for smaller companies, means that its value as a company is low.
The so-called market capitalisation figure, the value of the company determined by its share price, is presently hovering around 20p. This means Purplebricks is vulnerable to someone wanting to take control of the business.
The natural contender to take control might be Axel Springer, the huge German communications company that already has a 26% share of the company, and made an ill-fated purchase of shares when the share price was sky high some years ago. But it may sit on its hands.
The big problem with Purplebricks is that although it has been a cash cow in terms of capital flooding through it, it has only once given a marginal profit, and most of that was a one-time sale of its Canadian operations for north of £2 million.
So, who wants to be in control of a real estate company that does not make a profit, is likely to be fined for lettings irregularities and may have to defend against a class action regarding its employment model?
Poorly performing businesses in the estate agency space can be turned around. Look at the Connells group, who acquired Countrywide Plc, which delisted and converted to Limited rather than Plc status.
The difference here with Countrywide is that after the assets of CW Plc were acquired, the new owners had a C-suite who actually knew how to run an agency business, and they started to do just that. Amazingly the business transformed in its first year.
The problem with Purplebricks is that they need someone in the C-suite who actually can run an agency business. Remind me, what is Vic Darvey’s background? Maybe a CEO with agency credentials would be a start to close the disconnect from a user experience standpoint, and the realities of all the moving parts that agencies encompass.
The agency model is not rocket science, but somehow Purplebricks has turned into a science project that has gone wrong. Anyone becoming a controlling force of this business needs to have probably four key people who have the knowledge, vision and skills to push this company to its next stage. It is them who are the key, not who owns the business.
Zara Stanton is up for a new role, maybe as an advisory?
Is the Mulbury Homes collapse the tip of the new homes iceberg?
It has been announced that Mulbury Homes, a housing developer known for its affordable housing schemes, has gone into administration. Although only a small company with approximately 40 staff, it’s feared that up to 30% of other developers like it are very close to being in a similar situation.
The official line from Andrew Knowles, one of the administrators, is “The continued difficult trading conditions, rising costs, and financial pressures as a result of bad debt has led to a weakened cashflow position which has led to the appointment of the joint administrators.”
The problem for the industry as a whole is these factors are extremely prevalent with a number of other companies. Mulbury Homes has itself been trading for over a decade, building over 2,000 properties with a specialism in affordable housing. Despite having a number of projects in play for the future, they just could not trade on.
A recent statement from Mulbury Homes underlined this: “We had a strong pipeline of projects, and we were hopeful for the future. However, we have not been immune to the very challenging conditions facing the construction sector brought by the pandemic, planning delays, cost increases and supply chain issues.”
Having been researching where the pain points are showing up in the construction industry, specifically in the new home residential sector, it is plain that a huge number of industry voices have been predicting that home building in the UK is in a perilous state. The government needs to be supportive if it wishes to see a delivery of its 300,000 new homes annually, which presently hovers around only 178,000.
Looking at the present blockers in the industry, planning is a key problem. Until Gove sets out the framework moving forward, there is a very obvious scarcity of building projects with full planning attached. Land and development agencies have told me that in an effort to keep building teams together, builders are scouring around for projects that they can build hust to keep the cash flow moving.
The other problem, and a pretty big one at that, is the lack of materials. Not to mention the huge delays in delivery and the sky-high price increases that keep occurring. As such, many smaller SMEs will possibly not be able to continue. Without the materials they just can’t finish projects, so no cash throughput.
To make matters worse, the present lack of skilled labour means that day rates for builders have increased significantly. The work from home trend has also meant that many people are making changes at home, which is becoming a more lucrative way for trades to earn cash than being on a larger development site.
Another factor on the horizon is that money is no longer cheap to borrow. The BoE has jumped from 0.1% to 2.5% to 0.5% with other uplifts expected by year-end. This all factors into the underlying profitability of all companies, including new home builders.
Now Mulbury Homes’ accounts from 2019 and 2020 show wafer-thin profit levels and huge debts mounting up, but unfortunately for a number of similar businesses caught up in the covid cycle, where businesses became heavily disrupted, it is likely that Mulbury could be the first of many to flounder unless the Great Leveller Gove and the new housing minister step up to the plate.
Given Michael Gove’s present hard stance over remediation and fire risk problems, which he is looking to the construction industry to shoulder, it is unclear if extra funding to save small and medium building SMEs will be top of his agenda.
£29m Fine & Country listing available as the real thing or NFT
Hampton Hall has, according to the selling agent Fine & Country, “over 29,116 square feet of beautiful bespoke design, presented in Cotswold stone, flanked by Corinthian fluted columns and a 380 feet frontage. In excess of 70 magnificent rooms catering for dinner parties, guests, family, entertainment; in fact, this home will cater for your every whim.”
It is also remarkable in another sense as it is also available as a non-fungible token (NFT), so a buyer can purchase either of the versions; the real brick and mortar building, or a representation of the property that will only exist in the metaverse.
For many, especially in the slow UK real estate environment where the sale of property by private treaty has not really changed much since 1925 (when the existing protocol to transact land and property was last tinkered with) all of this may sound a little too much like science fiction.
But for those in the know, although Hampton Hall in Oxshott is very much a real prize property, adding the ability to buy its digital twin as an NFT raises awareness of the property. Across the pond, in America, they have already gone several stages further.
If you look at Natalia Karayaneva’s company Propy, they have been around some time and already transacted over 1,000 properties utilising the higher stages of blockchain technology.
Last October they were ramping up ways to give agents the ability to earn cryptocurrency tokens and personal NFTs on the Propy platform. For those not following all of this, technology and adoption of doing things differently by younger people may leave agents behind.
As Natalie puts it: “As cryptocurrency becomes more popular amongst younger buyers and sellers, agents need a solution to help them, Propy makes the process easy – and we can even help clients sell their home as an NFT, significantly reducing the overall closing time and costs vs. a traditional sale.”
Many may feel that the Metaverse and all that entails, like the blockchain and smart contracts, are a passing fad, but if you look at the people who are funding and sitting on the boards of companies like Propy you can see that they are very serious about changing how the property asset is transacted.
For what has been a very legacy and paper-based industry, new technology is being leveraged to give super-fast ways to transact, and this plays exactly to the digital native mindset of the people who are now coming of age and want to do property.
When I started selling property in the mid-1980s, the mobile phone at that time was hardwired into cars. A handset the size of two bricks was considered cutting edge. By 2030, spurred on by the pandemic and the need to adopt new technologies to trade in a non-face to face way, real estate will be in a very different space, with all the stakeholders communicating at speed, utilising completely different operating systems accepted as the truth by all stakeholders.
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