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Return of the city

4 May 2021
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Return of the city
London, UK - 18 April 2021: Outdoor drinking and dining outside pubs on Old Compton Street, Soho, central London

This week in five seconds

  • Offers returning in cities
  • Conveyancing is really slow - management packs taking ages
  • Boomin vs Rightmove - analyst doesn’t fancy their chances
  • Movewise focuses on getting sellers’ properties in front of the most buyers

 

Offers returning in cities

 

Last week we continued to see an active market with a good number of properties going under offer.

We have noticed that the interest in city living is starting to return as we begin to see the return to offices and the benefits of urban living being able to be appreciated. If your property has been listed for some time and you aren’t seeing the benefits of this positive market, looking at your viewing numbers could be the answer. If your agent has had a high volume of viewings but no offers it is likely that the asking price of your property may need to be adjusted.

Make sure your agent gives you honest feedback on the viewings you have had - have the buyers gone on to purchase alternative properties or have they failed to find?

If you have had very few/no viewings then it would be worth considering an alternative agent. You need to have an engaged agent who can generate viewings for you.

Conveyancing is really slow - management packs taking ages

 

The conveyancing process is generally still slow due to the volume of transactions.

We have also noticed that flats, where management companies are relied upon for information, are taking significantly longer than expected. If you are selling a property where a management company is involved, think about obtaining the management pack in advance of agreeing an offer. This is likely to save significant time in the long run.

Boomin vs Rightmove

 

We really like what the Boomin team are trying to build:  A better portal with more tech than Rightmove, helping agents and buyers.

Boomin has about 40-50% of the listings that Rightmove do (ref Apr 11: “Offers coming in strong”).

Movewise could list your property on Boomin for you if the agent you are using hasn't already done so.  We’d do it under our own brand name.  Call us if you’d like this.  We’re not clear that strategy is creating more value than the Rightmove listing at this stage so we are watching from the sidelines.

However I wanted to share Mike Del Prete’s analysis of Boomin vs Rightmove as we think he’s really smart.

Mike thinks: 

Attempting to directly compete with market-leading real estate portals is an incredibly difficult proposition, with success unlikely. The unique challenges include:

  • Incremental gains in market share don't equate to incremental gains in value.
  • Getting listings is the easy part. Building traffic is hard.
  • Product differentiation means little. The main value to users is reach.

In short we agree for now because we would never recommend “not listing on Rightmove” and we can’t see why customers would accept that as a strategy with their highest value asset.  Therefore Boomin is an extra cost line (notably not this year as its free for agents in 2021) for agents who already don’t make enough money.

So Boomin must not compete for leads with Rightmove but compete for dual listings by providing agents with extra revenue streams.  Then it's basically a dual listing fee generator - until Rightmove copies their non-listing business lines with its massive £135M of annual profit.

MDP on OnTheMarket: MDP also pitched investing in OnTheMarket as being a bad idea in 2017 (here).  Seems he was right.  It IPOd at 150p and is currently at 90p, down 40% in a period Rightmove is up 35%.

MDP on ibuyers: MDP doesn't think “ibuyer models”, the ones VCs love pouring capital into, ever make any money.  He gets this from analysis of the big US ones (see here).  

We can validate this from the customer activity we experience at the coalface.  

The quick reason is: because a house is so expensive and owned by retail, the “liquidity discount” a customer is willing to accept in nominal terms is really low: say £5-10k.  So this means the ibuyer proptech model has to purchase at such a tight discount to fair value to actually get any customers willing to transact that the risk return on buying and flipping doesn't make sense and the ibuyer loses money.

In short: it works on £100k houses and does not above that.

Movewise focuses on getting sellers’ properties in front of the most buyers

 

That's why at Movewise we are focused on delivering the most buyers a property can get.

(Large agent applicant list + Portal leads + Agent energy ) * multiple agents sequentially = More buyers

Only when you manage a sale like this can you maximise demand and therefore the result for the seller.

That is our goal: Sell you more often for more than any other agent can.

Have a great week.

The Movewise Team

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