Proptech & Property News Weekly Roundup: Rishi Sunak, Connells Group, Boomin, Spring Market

A roundup of the week’s top proptech and property news in association with Estate Agent Networking.

PRESS RELEASE: Connells Group financial results show most profitable year to date

Leading estate agency and property services provider Connells Group today announces a stunning set of results for the year ended 31 December 2021, with total revenue of £1bn (2020: £375m). The Group reports EBITDA of £181.1m (2020: £80.5m) and pre-tax profits of £111.3m*1 (2020: £51.8m). The results include Countrywide’s performance following acquisition of the business in March 2021.

Key performance indicators include:

  • Total house sale exchanges up 44%*2 on a like-for-like basis;
  • Buyer registrations up 38%*3;
  • Ended the year with largest market share (10% – up from 8.9% at point of Countrywide acquisition) and branch network of any UK estate agency group (1,250 branches, equivalent to 7% of branches nationwide);
  • Over 11,500 new homes sold and new homes income up 16%, remaining the largest agency seller of new homes in the UK;
  • £35+bn worth of mortgage lending generated and mortgage services income up by £75m;
  • Lettings income and move-ins both increased by 5%*2 on a like-for-like basis, with 150,000 properties under management;
  • Surveys and valuations’ income increased by £80m, with over 750,000 jobs handled;
  • Conveyancing completions increased by 51%*2 on a like-for-like basis, as purchasers sought to benefit from available stamp duty savings.

“2021 was an historic year for Connells Group with the successful acquisition of Countrywide, as well as numerous other strategic moves, consolidating our position as the largest and most successful property services group in the UK,” says CEO David Livesey. “Our people have come together brilliantly, propelling our enlarged business forward to achieve record results.”

The acquisition of Countrywide in March 2021 combined two highly complementary businesses to build a stronger and more efficient branch network, and a more integrated and enhanced suite of services to customers and clients. Further acquisitions in the year include Hall & Benson and Holroyds estate agents. The Group continued to grow its footprint, market share and headcount in 2021, ending the year employing 16,000 colleagues – 1,000 more than at the point of the Countrywide acquisition.

During 2021, Connells Group repaid almost half of the £253m loan used to fund the acquisition, as well as making dividend payments of £60m to Skipton Building Society. The Group also invested heavily in its technological offering, with notable partnerships announced including Zoopla, Yoti, MBT Affordability, Aviva, ZeroDeposit and Twenty7Tec. The ongoing development of its proposition remains a crucial focus for the Group and, looking to the year ahead, will be further enhanced by the development of new Environment, Social and Corporate Governance (ESG) and Diversity & Inclusion (D&I) strategies.

David says, “A year ago, we took the opportunity to integrate two of the leading businesses in the property sector and, with a clear strategy, confidence and drive, we’re very proud to have achieved everything we set out to do, surpassing all expectation and creating a power house group within the industry. This venture has proven not only to be a great triumph for our business as a whole, but has opened many more opportunities for our people and our customers.

“Entering 2022, we’re positive for the year ahead and, although stock remains a challenge, we have confidence that our market-leading proposition, investments in technology and growing branch network will continue to drive our business forward. Above all, our commitment to our people remains at the forefront of everything we do and we could not have achieved all that we have in the past year without their sterling efforts,” David concludes.

Notes:

1 Includes gains of £27.1m from the disposal of the Group’s shareholding in TM Group (UK) Ltd – July 2021 

2 Combined Connells Group and Countrywide figure for full year on a like-for-like basis 

3 Connells Group excluding Countrywide 


This is why Boomin is becoming the innovative property platform of choice

Since its launch, it’s been clear that Michael & Kenny Bruce’s Boomin is not in the same race as Rightmove, Zoopla and OTM. Instead, it has set out to be an innovator servicing the needs of stakeholders looking to do property.

In simple terms, Rightmove is a digital billboard that advertises property inventory for real estate professionals, increasing the charge annually for the privilege. It has proved a great model, generating 70% gross profit annually while at the same time growing its revenue base. 

When Boomin launched, analysts and property pundits said that it would not replace Rightmove, instead crashing and burning as it used millions to get brand awareness up and running. 

From an analyst’s perspective who held calls with the Bruces prior to its launch, I could see from day one that they were on a very different trajectory to the two-decade-old Rightmove portal model.

They were set to be pioneers, innovators even, sampling and testing the needs of the public and agents and building their model around it, showing true digital agility in the process.

Boomin has, up to this point, incorporated many different ideas into their offering. Also, I imagine they have also test-driven some others and found them to be wanting. But as a start-up, they have the huge advantage of moulding their service, unlike the other portals, until they find market fit. 

Taking just one area of innovation, Boomin understood the value of social media and the role of influencers. Setting up their property YouTube channel, fronted by WillNE – an online personality with followers in the millions – was a masterstroke.

In the early weeks, however, this move was derided by many as just a sideshow to get some PR publicity, but the intent was far deeper and more coordinated. I spoke with Phil Lloyd at the time and it was clear that he was going to do things differently.

As he put it, everyone loves property, but… “until now property social channels have failed to provide suitable content to feed our addiction. People are looking for something new and fresh; they want to see the most exciting, jaw-dropping properties in the UK presented by the most influential people that are relevant to them, online.

“The majority of our subscribers are homeowners. We’re engaging a large, broad audience of consumers who are very much into property in a new and compelling way … We have huge ambitions to become the most entertaining property brand online, building a loyal subscriber base, and helping agents to connect with these audiences.”

I have been watching the development of Boomin closely, even though they are not one of my clients from my Proptech-PR consultancy, so I have an agnostic view. However, I really believe that Michael is a visionary, and when we finally met up for a pint and a talk at the end of last year it shone through. He just wanted to ‘move things on.’ As has been quoted before, Michael sees Boomin as the next chapter of property.

Michael Bruce, Boomin

“Our DNA is all about innovation for agents, better experiences for everyone and helping agents to grab back the balance of power that they deserve as a customer of all the portals,” he says.

“Boomin was created differently, from the ground up, with the latest technology and a world-class team, which includes over 100 experts building on our technology every day. We will never stop innovating for the benefit of our agent partners – it is our DNA.”

Now Boomin has just announced that it is the top runner out of all the portals on YouTube – not bad for a nine-month sprint. This adds further credence to the idea that agile, lean businesses can often outgun behemoth legacy businesses that sit back and just wait for the cash to roll in. 

Companies would do well to understand that user experience is king. Amazon noticed this early on, too. Look at them now.


PRESS RELEASE: What impact will growing economic headwinds have on the Spring market?

There is no doubt that 2022 has started with a flourish in the market and Spring is traditionally a time when activity increases, however, with the recent interest rise and growing pressure on consumer’s back pockets, will we continue to see the high levels of demand and surge in property prices that have been the theme of the market for the past while.  We spoke to some Members of The Guild of Property Professionals about what they foresee happening to property prices in Spring and beyond. 

Looking at property prices, Jim Stillwell, Branch Director at Keats Estate Agents in Haslemere, says: “We expect property prices to remain high in Haslemere due to the severe lack of stock and high demand from buyers searching for a home in the area. The supply of properties coming to market is low and properties that are marketed with us are selling quickly, however the Spring market is likely to bring more activity. We predict that competition amongst buyers will remain high throughout the year. Many are often prepared to pay in excess of the asking price to secure their ideal property.” 

Sales Director at Barbers Estate Agents in Shropshire, Matthew Arthan, agrees saying: “Whilst there is still a general shortage of stock, my view is that property prices will continue to rise until either stock numbers increase to more normal levels or macro-economic factors worsen considerably more.”

According to Dan Henry from Bensons, stock constraints are still an issue in Northern Ireland. “Demand continues to outstrip the supply of property, and typically highly sought-after properties attract strong enquiries resulting in guide prices being exceeded. New builds continue to show strong growth with new releases typically being over-subscribed and booked within hours of being released. Traditionally the spring represents the most popular time to list your property for sale and it is anticipated the level of supply within the marketplace will increase. Despite the Global challenges we remain confident that the local property market continues to recover post Covid, and high levels of confidence continue to prevail within the marketplace.”

Richard Stovold, Owner of Seymours Guildford and Burpham offices adds: “Our view is while there is a strong interest from buyers to secure homes close to highly regarded schools with outstanding countryside pursuits on their doorstep, prices will continue to rise.  Perhaps not at the pace of 2021, which was fuelled by the stamp duty holiday, but a more realistic upward trend.  It is all about supply and demand which at the current time is in favour of a seller, with multiple buyers chasing each property place on the market.”

Head of Sales at Whites Estate Agents in Salisbury, Tony Williams says that he believes that the market will continue to be strong this year but suspects that next year the brakes will come on. “At the moment buyers so outweigh sellers that I cannot see any reason, even with rising general costs, Ukraine, and rising interest rates, that we will slow down. Currently we are listing correctly priced properties, which will sell within a week with multiple viewers and mostly multiple offers. We never list anything now without the term ‘guide price’. Fundamentally we have way too many people living in the UK for too few properties. We have buyers pouring out of the cities to ‘buy twice the house at half the price’ who can work from home and the older generation who are moving to be near children, all of whom bring good money with them and don’t haggle over the asking prices. Property prices will therefore continue to rise this year and I suspect by around another 10%.”

Alex Walton, Sales Manager at Bradford and Howley, believes that prices will continue to increase but not at the rate of knots of 2021. “There is still an imbalance of buyers to sellers at the moment. Stock is coming on and it’s selling very fast, so I think that stock levels will stay the same,” he adds.

James Millard of James Millard Estate Agents in Kent, expects to see very little fluctuation in headline marketing figures with any effect absorbed by way of the subsequent reduction of asking price, should a property remain unsold. Speaking about stock levels, he adds: “Based on the expected scale of interest rate increase, I would not expect stock levels to rise. However, and more importantly, if we see an end to the war in Ukraine, a continued economic recovery after Covid and renewed impetus in strengthening the UK economic position globally, post Brexit, people will gain confidence and there would be a whole new surge in activity.”

Branch Manager at Norman F Brown in Bedale, Simon Davies, says that in his area they still have a market that has low supply and high demand. “Stock levels are not increasing at present, and we can’t see what will change that in the short to medium term. However, we anticipate demand will drop as the year goes on due to high inflation leading to more interest rate rises, causing mortgages to become more expensive as the year goes on. This may lead to some buyers being priced out of buying and demand will then drop which will impact on the rate of house price growth. With this in mind, if buyers are seriously in the market they should buy sooner, if possible, rather than later, to take advantage of lower interest rates making their mortgages cheaper and more affordable.” 

Melfyn Williams of Williams & Goodwin and All Wales Auction believes that 2022 could be the year of stability and return to normality in the housing market. “With rising inflation having to be controlled and in turn, expected interest rate rises, we expect a cooling of rapid house price growth in the medium term, which will be good for the housing market.  Most ‘booms’ and significant house price growth last about 18 months – any longer periods of sustained rapid growth usually end in misery; therefore, a cooling now is to be expected and notwithstanding outside issues affecting the market – should provide a return to normality rather than a crash.”

While most agents experiencing constrained levels of stock, some are seeing an increased number of listings coming market. According to Richard Harrison, Director of Bentons in Leicestershire, his office has seen an increase of around 20% month-on-month so far this year.  

Director of C Residential in Staffordshire, Angi Cooney, says: “We know that our stock levels are increasing with more people coming onto the market. This cannot be said for all agents in our area.”

Residential Sales Manager of Millbank Estate Agents, Donna Vincent, says that she is seeing stock levels slowly increasing since the beginning of the year, although they are still at an all-time low.

Roger Wilkinson of Wilkinson Grant & Co in Exeter says: “As the green shoots of Spring begin to show through and Covid begins to loosen its grip, stock levels are already on the increase as a new wave of home movers enter the market. Judging by the vast numbers of market appraisals we have carried out in recent months; we predict a return to a ‘more normal’ market in quarter two and with it a slowdown in house price growth.”


PRESS RELEASE: NAPB – The Chancellor Could Have Gone “Further and Faster”

The Chancellor could have gone “further and faster” in rolling out policies which would help homeowners and the property market, an expert has said.

Jonathan Rolande, from the National Association of Property Buyers, said: “Axing the 5% VAT on insulation and energy saving products is welcome and long called for, but Rishi Sunak could have gone even further with enhanced tax reliefs for landlords to get their tenant’s homes warmer and cheaper to run.

“The Spring Statement is only ever the poor relation to the budget itself although in these unprecedented times an opportunity to do more was lost. Many businesses are already thriving, he was right to be prudent to avoid adding to the inflation problem but more targeted help to families would have been welcome.

The fuel cut of 5p is less than the enhanced VAT currently being generated so at today’s prices the Government is still winning. Inflation averaging at 7.4% means much higher rates expected at least for a short time.”

Jonathan Rolande also outlined the measures he’d like to have seen.

“Rishi Sunak could have increased the second property Stamp Duty,” he added. “This would have helped suppress the BTL/second home market. Additionally, we’d have benefited from seeing an increase in overseas buyer stamp duty from 2% to 3% for first property increasing to 4% for subsequent homes. I’d like to see him increase the FTB 0% stamp from £300,000 to £350,000 to reflect the huge price increases we are seeing in the market.

“I’d also back handing landlords tax relief on insulating materials for let property – it is a scandal that tenants must live in cold, expensive to heat homes that they are unable to insulate themselves. We should also cancel 5% VAT for insulation.”

About the NAPB: 

We are a group of professionals committed to providing the highest possible standards in the property buying sector. Formed in 2013 the Association has worked closely with The Property Ombudsman to form a new Code of Practice to create a set of guidelines that will raise standards in the industry.

Membership of the Association is voluntary.

All members must have signed up to The Property Ombudsman Code of Practice so consumers can expect a fair and transparent service when selling their home to a member agent, with the additional peace of mind that they can access TPO’s free, impartial and independent dispute resolution service in the event of a complaint.

The NAPB is run by members who are keen to help sellers decide whether a professional cash buyer is right for them. 100% of all income generated by the organisation is re-invested in to marketing and promotion to assist sellers in reaching a decision that’s right for them. For Media/PR queries call Nick Owens on 07709 339653


Proptech & Property News Weekly Roundup in partnership with Estate Agent Networking

Andrew Stanton is the founder of Proptech-PR, a consultancy for Founders of Proptechs looking to grow and exit, using his influence from decades of industry experience. Separately he is a consultant to some of the biggest names in global real estate, advising on sales and acquisitions, market positioning, and operations. He is also the founder of Proptech-X Proptech & Property News, where his insights, connections and detailed analysis and commentary on proptech and real estate are second to none.

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