Online battle for sales

Property sites are becoming more sophisticated

By BBC News Online's Alex Hunt

The battle is hotting up to win the lion's share of the UK's online house buying market.

There are thought to be more than 250 different web sites battling to attract buyers' attention.

I think that in a couple of years 90% of properties, if not more, will be posted somewhere on the internet

Neil Mackwood

But within that battalion of virtual - and real - estate agents, there are a handful of would-be giants emerging.

As with most things online, the earliest into the market have been able to grab a large chunk of the market, as well as the best names.

For latecomers it has meant that large sums of money are having to be spent to get their names known.

Competition fears

But many of these latecomers are backed by the big beasts of the property jungle, and are armed with considerable war chests.

The most recent to launch is Asserta Home, backed by CGU, which claims to be the largest UK property database with 180,000 properties, or what it says is 50% of the market.

Other include Fish-4-Homes, set up by a grouping of local newspaper groups, Rightmove and 08004homes, which has recently renamed itself to get ahead of the mobile internet game.

A couple of clicks can save time

What they all want to do is build up the largest selection of properties on the web, so potential buyers always visit their site when it becomes time to buy a property.

The competition is growing ever more fierce, with legal action currently being taken by one smaller site accusing another of its smaller rivals of stealing its adverts.

Credibility problems

Hugh Dunsmore-Hardy, chief executive of the National Association of Estate Agents, said that protecting homebuyers from "net pirates" was one of the industry's main concerns.

"Credibility problems are caused when information is lifted from the web site of established organisations and then inserted into other sites without the knowledge of the original estate agent," he said.

Some of the sites charge agents to advertise, but many don't because of the desire to build market share.

Fish4Homes offers agents shares in the company in return for being allowed to display their properties.

Others aim to make their money by selling financial products to house buyers.

There are a range of services offered online

One of the contenders aiming to become a Yahoo, rather than a Boo, is 08004homes.

Neil Mackwood said that the potential market was huge, quoting one Dulwich estate agent which says 50% of its sales are now generated online.

"I think that in a couple of years 90% of properties, if not more, will be posted somewhere on the internet - and the majority of people will do their research first on the internet."

Andrew Pendery, from Find a Property, whose three year history qualifies it as a veteran, says that business has grown by 50% so far this year.

Moving to US model?

It charges agents to advertise, but links straight through to agents home pages, and deliberately has no advertising on its pages, says Mr Pendery.

This is to ensure that agents can still have the potential benefits of selling financial products to buyers.

"Some new sites are so desperate to tap into revenue from financial services that they are paying agents up to £1,000 per branch to register," he said.

"We calculate that for every £50 our customers spend advertising with us they make approximately £1,000 or more in fees."

You could see a day when the agent is in an office, sharing desks with other, rival agents

Hugh Dunsmore-Hardy

The move online is undoubtedly going to change the way British estate agents operate.

Mr Dunsmore-Hardy believes that the UK market is set to take a leaf out of the US book, with less emphasis on the glitzy high street agencies.

"An increasing number of people are using the internet to find their homes but it would still be fair to say that the majority of enquiries are through the door or newspaper.

"The future of agencies is not under threat, but the manner in which we promote our business will evolve.

"You could see a day when the agent is in an office, sharing desks with other, rival agents."

They would then go out to meet potential housebuyers who have contacted them after seeing the property on the web, or be employed as buyers' agents.

This would mirror more the US pattern where there is not the same reliance on spotting your potential dream home on a prime high street spot.

The little-disputed fact is that anyone who wants to buy a house is increasingly likely to do their research online first.

While that can cut down the hassle of finding a home, it will still need an agent in most cases to handle the sale.