easyJet founder Sir Stelios Haji-Ioannou aims to make buying a home easier
The entrepreneur behind the budget airline has entered the competitive world of online estate agents. Rob Griffin looks at what he, and others, have to offer house hunters
Friday 18 April 2014
He has already revolutionised air travel with his innovative, no-frills services, and now entrepreneur Sir Stelios Haji-Ioannou is planning to enter the increasingly competitive world of online estate agents.
The founder of airline easyJet is joining forces with property entrepreneur Robert Ellice to "shake up the UK property market" and make buying, selling, renting and letting "simple, quick and cost effective".
The site – easyproperty.com – is expected to launch at the end of the summer. It will initially focus on lettings with services for residential sales likely to be introduced next year.
Mr Ellice is pledging that the new, totally web-focused venture will slash fees by making property transactions straightforward and offer more services than are currently offered by traditional estate agents.
"The sector is ready to take off and we have got an internationally recognised brand," he says. "We can offer choice, cost savings and don't need offices across the country. It will be a new-style estate agent of the future."
Key will be building something that is more flexible and convenient. In particular, he makes the point that many transactions can be made at any time of day.
Which begs the question, why you would want to be restricted by office-opening hours when it comes to house sales?
"It's ridiculous that you can view the property online but you can't do the paperwork or put your deposit down," Mr Ellice adds. "If you want to move in on the weekend you can't pick your keys up easily so have to take time off work. That's not for today's lifestyles."
Of course, saving money by sidestepping traditional estate agents is nothing new. For many years people have tried marketing their own properties on eBay, setting up websites to showcase their homes and doing leaflet drops in a bid to find potential buyers.
The new venture by the easy team will be the latest in a long line of websites launched to take advantage of our love for the internet and general disillusionment with paying thousands of pounds in commission to traditional estate agencies.
When you consider the cost benefits you can understand their enthusiasm. Even though fierce competition means many agents now charge just 1 per cent of the selling price, this still equates to a fee of £2,540 for an average house worth £254,000.
Given the fact that many online rivals charge around £500, property consultant Kate Faulkner of Designs on Property isn't surprised that the demand for web-based services has been growing in popularity, but points out it's not a straightforward choice.
"This market can be divided into three groups," she explains. "The first are traditional agents that have a high-street presence but also an online facility. Then you have the early online agents (passive agents) to whom you'll pay £50 for them to put it on a website."
The final group features the online businesses offering estate-agency services.
"These are the most interesting," she says. "They offer all the services provided by an estate agent, such as being on the end of a phone, and can advertise your property on the likes of Rightmove, which you need to be on in order to reach the whole market."
Sir Stelios is taking advantage of our general disillusionment with paying thousands of pounds in commission to traditional estate agencies (Getty Images)
There is certainly no shortage of offerings with the likes of eMoov (www.emoov.co.uk), House Simple (www.housesimple.co.uk) and Hatched (www.hatched.co.uk) all offering various options to sellers depending on their needs and how they want to pay the fees.
One of this new breed of online offerings is Tepilo (www.tepilo.com), which has been set up by property developer and television personality Sarah Beeny, and claims to offer all the services of a traditional estate agent – but just online.
A member of The Property Ombudsman Tepilo follows its code of practice. As well as sending round an agent once instructed, it will also handle any offers received.
"I felt there should be an option for people to be able to pay less if they wanted to," Ms Beeny explains.
"People can get all the services they need and have their property online, which is where the buyers are, without having a high-street shop."
One of the options offered, for instance, requires an upfront payment of £495, which includes basics such as a home visit and advertising on Rightmove and Zoopla. Optional extras include a for sale board (£50) and professional photography (£99).
"People want to decide how much hand-holding they need," she adds. "If they want floor plans they should be able to pay for them. Similarly, if they want someone to deal with the viewings then they can pay extra. It seems a fairer way to do things."
Regardless of which online offering is most suitable, sellers need to ensure they have some element of protection, according to Christopher Hamer of The Property Ombudsman (TPO) scheme, an independent and impartial dispute-resolution service.
For example, members of TPO agree to comply to a code of practice which includes strict guidelines on issues such as market appraisals, what constitutes a fair contract, clear charging structures, and transparent terms and conditions.
"Consumers may not realise they aren't dealing with a proper estate agent until they find out later they don't have access to some of the protections," he says. "The passive agents are not subject to the same obligations that a normal estate agent must adhere to."
For example, the ombudsman can make compensatory awards in individual cases up to a maximum of £25,000 for actual and quantifiable loss and/or for aggravation, distress and inconvenience caused by the actions of a registered firm.
When you consider the latest report from the TPO reveals the number of complaint enquiries received rose 25 per cent in 2013 – 63 per cent of which were from sellers – it illustrates how important it is to safeguard your interests should problems occur.
So what else do you need to consider when choosing the right service provider?
The first step is to see what's on offer, what you will get for your money and which extras will be required – then you can decide if this meets your needs, according to Mark Hayward, managing director of the National Association of Estate Agents.
"They are not going to be able to offer all services at the rock-bottom prices that some are quoting," he says. "It's like buying a budget air fare. You will get other things added to your bill, such as floor plans, so the headline figure may not be what you end up paying."
It's also important to establish the agent's expertise in valuing properties, the role they will adopt throughout the selling process and what will be expected of the seller. All of these are crucial factors to consider before making up your mind.
"Only an agent on the ground selling day-to-day in your area will know exactly what you're going to get for your property," he adds.
"Also, if you're paying up front then what incentive does the online agent have to get your property sold?"
In addition, you need to know your limits, points out Ms Faulkner. "Not all online agents will do viewings – and it's much nicer for the buyer to have a third person not attached to the property showing them around as it can otherwise be quite awkward," she says.
It all goes to prove that the decision is not a simple one.
"I've seen a few (online) business models that would work but other sites are confusing, not upfront with their fees and fail to give good advice – such as the requirement to have an energy-performance certificate in place at the time of viewing," adds Ms Faulkner.
Despite all these new options becoming available it's not time to sound the death knell for traditional estate agents just yet, agrees Mark Hayward at the National Association of Estate Agents, who suggests that 80 per cent of what an agent does starts after a buyer is found.
"When you're dealing with a member of the public's largest purchase they will want traditional assistance with someone managing them through that process," he says. "We're in the digital age now so there is a place for online services – it's just not clear how big it is."
Case study: Website seller
James Daley sold his property via an online agency and had such a good experience he can't understand why everyone isn't going down this route.
The 36-year-old, who runs Fairer Finance, sold his two-bedroom flat in Wandsworth, London, via website Hatched for just a few hundred pounds.
And considering the sale price was £206,000 he managed to save himself more than £2,000 by not going with a traditional estate agent.
"I thought it was brilliant," he said. "I saved a lot of money and the only downside was that you didn't have anyone showing people around when you were out.
"You just had to be flexible enough to ensure someone was home for the viewings," he added.
Unsurprisingly he would use online services again.
"People are just as likely to come across your property on one of the big search engines as they are by walking in to a high-street agent."
Customers paying up to £250 more on energy bills than they should every year
Scottish Power hit with sales ban by regulator
10 tips for taking out a personal loan
There are 'dark corners' of the investment and pensions industry, says Pension Minister
Simon Read: You're guilty until proven innocent when HMRC sends in the tax credit detectives
Durham Free School: 'Creationism taught at' free school facing closure
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
End of the licence fee: BBC to back radical overhaul of how it is funded
Nigel Farage promises Ukip will not 'stigmatise' would-be migrants – and says he wants 'everyone to speak the same language'
Ex-head of MI6: 'We shouldn't kid ourselves that Russia is on a path to democracy'
Most people think legal tax avoidance is just as wrong as illegal tax evasion, poll suggests
iJobs Money & Business
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
£8 per hour: Recruitment Genius: This Pension Specialist was established early...
£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
Day In a Page
This school conversion, near Stockwell Tube, oozes New York loft style. The one-bedroom flat features double height ceilings and exposed brick work
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads