UK online real estate: show me the money

There is a buzz in the UK market around the new startups (Extate, Zoomf, Nestoria, OnOneMap and others) that are leveraging mashups to provide higher value added services in property (or real estate for the Us readers).  Property is the #1 topic of conversation in London and most Brits are obsessed with the value of their property (yes, that would include me).

The content sources are well know and available to all, e.g.:

• the listings sites like fish4 or the actual agent sites like Foxtons
  
• maps
• the Land Registry pricing data
  

So set up some basic spidering and off you go, you can create a Web2 real estate service.  For example I now know that my neighbout did hit the target price on his house :-)

I am glad to see the next wave of innovation in this space; God knows it's needed.  As an example the only company that seems to be doing any SEO/SEM is PrimeLocation.

But for most of these services, I don't understand where the big money is. 

Some of the mashup companies that I have met are metaservices: they are relying on other people's listings and hoping to capitalise on high value CPC as the agents and sites fight for qualified traffic. But RightMove won't let you spider (with 30% of the listings inaccessible, that's a problem) and guys like Fish4 are supposedly as low as 30p per click.  I don't see how you build an attractive business without capturing more of the value.  The metrics just do not support it in my view.

Most of the startups are well aware of this so they have started to do more than spidering the portals but rather are extracting additional information directly from the agents' site (wether parsing or using feeds) and therefore disintermediating the portals.  Here the aggregation value is in building a slicker interface (no doubt price sliders a la Kayak are around the corner).  The proposition makes plenty of sense for travel which is used to paying referral fees and is a fantastic repeat business with multiple providers offering essentially fungible goods (flights from A to B) and fighting for the same customer.  The same does not seem to apply to real estate which involves unique goods traded once only.  You have the double challenge of driving enough volume to reach critical mass and getting agents used to paying for link placement or search terms.

The UK is a market that is fully intermediated (90% goes through agents), unlike say France.  If you are after the listing fees, attacking the world of the agents is hard work.  Nic says many agents are tired of paying the high listing fees demanded by the likes of RightMove.  That may be, but right now I don't see enough of them moving shop without a sales call from a qualified rep and some convincing numbers to boot.  I am not sure a free listings offering would be enough on its own to make a real dent in the market leaders either.

At Atlas we are still looking hard for the right opportunity in this space, one that can prove both disruptive but also sustainable and become the next gen leader.  Vecosys annouced Zoomf's funding recently and I am sure others are in the works (it does not take much to run a "pure mashup" so many companies may well remain non-venture funded); Extate also took some funding.  I for one am not sure we have seen that company emerge yet.  FWIW Extate is my current favourite (award for best interface and what awards to be the best extraction backend, apparently all crawl and parse).  I see that Saul also feels this way.

One of these new companies has a shot at creating enough traffic momentum to gain in the foothold in the agent listing business or at creating a nice but small sustainable CPC business in vertical search.  But where is the next gorilla ?

technorati tags:property, realestate, extate, zoomf, nestoria, ononemap, saulklein, vecosys, nicbrisbourne

Comments

[Jeb Archer]

What people dont realise is that green homes and buildings are not only worth more (resale value) but are creating more reveneu as well. Higher occupancy rates paired with higher rental premiums equals more money in VC's pockets.
www.initred.com

[Jeb Archer]

What people dont realise is that green homes and buildings are not only worth more (resale value) but are creating more reveneu as well. Higher occupancy rates paired with higher rental premiums equals more money in VC's pockets.
http://www.initred.com

[Georgy]

Hey Jeremy-

i would like to differ for your comment:

"You are right: the real opportunity is the value appropriation by estate agents. I reckon they are all heading the wrong way--towards building larger and larger staffs and more and more physical assets (swanky shops)"

i am sure there are other estate agents like ourselves who believe in using technology to revolutionise the online search market. i would like your opinion on our propertybird application. we are the first in the UK to run this new way of looking for property through crystal clear bird's eye views. http://www.london-executive.com/propertybird

[Mike Carter]

I would agree with a couple of the comments however I would not under-value even the small amounts of traffic garnered by vertical engines. An argument can be made that the traffic on a vertical engine is much deeper and specific than your 'typical' rightmove user. So using the usual search arguments that long tail traffic is closer to buying decisions means that vertical engines are very valuable in the metrics that agents love so much; clicks, emails and phone calls.

At Zoomf we are of the opinion that you are looking at very early stages of products across our space. Innovation and new features will only help to shift the non-moving antiquated portals who currently dominate.
6 months from now I would bet all the 'new' entrants look quite different indeed.

And who said selling to agents was hard? :-)

[Ian Bartlett]

Apologies if this is inappropriate - but can anyone share experience on how to extract data from Vebra. I've a site to build yet for an agent using Solex/Vebra and find their feed so inflexible and their server unreliable. I really want to pull it out and store/display independently. No one seems to have asked this anywhere before! Many thanks.

Ian

[Tim R]

The cost of homes for sale is now on the decline. Buyers go out and negotiate.

[Mike Bygrave]

We're not involved in the property market, but as a niche vertical search engine, with its own CPC system and B2B lead generation, we like to think that we're one to watch.

Have a look at thewebstoobig.com/pr to see what we're up to. Please note, the site is currently in beta status.

[azeem]

Hey Fred,

You are right: the real opportunity is the value appropriation by estate agents. I reckon they are all heading the wrong way--towards building larger and larger staffs and more and more physical assets (swanky shops).
The average estate agent commission in London is £8k--so there is fat to cut.

One player to watch is Guardian Media group which acquired Vebra, which provides the back end to a bunch of independent estate agents, last year.

Also check out Hometrack which I figure is minting money for its algorithmic valuation service for mortgage firms. Opined on all of this a few months back: http://azeem.typepad.com/blog/2006/07/solving_house_b.html

aa

[Jeremy]

Fred

We should chat

Jeremy

[vols]

Take also a look to a travel search engine called Trabber. Here is the address - http://www.trabber.com