Over the last 5 to 10 years, the residential property market has witnessed the impact that Rightmove and Zoopla have had on the way that residential properties are bought and sold. The websites allow buyers and renters to find out everything they need to know about a property without setting foot in an agent’s office. Companies such as Purplebricks have recognised the reduced role that the estate agent has in the house buying process by offering fixed fees for acting for sellers which are often a fraction of the price of the commission that agents would traditionally charge. A look at the number of residential transactions that Purplebricks have advised on over the last few years shows what an impact the company has had.
To date, commercial property agents have escaped such disruption but is this about to change?
A number of companies are coming to the market who use data to make the property market more transparent to buyers and tenants. New online platforms offer a greater wealth of data than ever before and provide the sort of information on properties that buyers and tenants might normally employ an agent to obtain. Others are providing means to do business in a standardised way in a bid to mitigate transaction risks
Shoreditch start up, Hubble, for example, seeks to bring together people hunting for flexible office space and hotdesks with those who own it on an online platform. Landlords are encouraged to make as much information as possible available on the space that they are seeking to let and tenants can then contact the landlords direct to arrange viewings. A range of standard documents are then made available to help the landlord and tenant document the agreement reached.
Through this process, the role of the agent (and lawyer!) becomes unnecessary and the company claims that average transaction times can be vastly reduced as a result.
Of course, the use of data alone could never fully replace the agent on more complex transactions and the model put forward by Hubble will at present only work with straight forward licence type arrangements. On complex longer term leases tenants will still look to an experienced agent to get the comfort that what a landlord is offering is reasonable and represents the market norm, but on a shorter term, lettings where tenants are more likely to take a risk, the role of the agent could soon become obsolete.
Agencies are alive to the threats posed by data and technology and larger companies are investing heavily in both to remain relevant.