How is London’s Leading Prime Agency Weathering The Capital’s Sales Slump?

Hamptons International did not have a good nineties and noughties. Bought and sold several times by UK and overseas property blue chips, it wasn’t until 2010 that it finally found a more permanent home as part of the Countrywide empire.

Despite the difficult times faced by its parent company, Hamptons International has managed to find its feet again, begin acquiring competitors, increase market share and add to its branch count.

It is also celebrating its 150th anniversary since being established by a London furniture magnate, and in theory it should have plenty to celebrate – at over 90 branches the company is one of the UK’s top prime estate agents.

But unlike Savills and Knight Frank, it covers a much wider range of the market and also benefits directly from the ‘network effect’ of referrals it receives from Countrywide’s other 60 brands and 600 offices.

But it’s not all been plain sailing. Like all agents which rely heavily on London and the Home Counties, it has faced several recent tests other than an ailing parent.

At a glance

  • Hamptons International has seen significant drops in sales instructions, appraisals and stock as London’s property sales problems have continued.
  • The company claims the market is showing signs of turning the corner and that deals are finally being done.
  • London sales director admits Purplebricks is making some progress within a few of its markets, and has yet to embrace proptech in the same way some competitors have.

Its core market has been a tough place to do business over the past three years, and it has faced competition from both online agents and traditional adversaries who have embraced tech to impress clients and make efficiencies.

Dealmakerz spoke to its London sales director Mary Beeton, who after an eight-year spell at Foxtons joined Hamptons International in 2003 as an associate director.

“I’m a career estate agent, always in London and always sales, although I do work closely with my counterpart in lettings; our business is 50/50 sales and lettings these days,” she says.

Beeton has the hand on an important tiller within the estate agency which includes 34 branches and she has an unusually keen eye on how the London sales market is performing, both internally and for its customers.

One thing she has strong and unusual views on is Brexit. She says it has created uncertainty in the market but long before the 2016 referendum took place both Stamp Duty and the changes to lending swept in by the Mortgage Market Review had already softened the market in London.

“Even if Brexit hadn’t happened we would still have had a softening of the market but Brexit has brought uncertainty,” she says.

“These are two quite different things in my opinion – and it has been the transaction levels that have been most greatly reduced by Brexit.”

25% drop in appraisals

This has punched some hefty holes in her core sales business, including a 25% reduction in market appraisals year to date, a 22% reduction in instructions and an 8% drop in stock.

“Despite this, we’ve seen recently an increase in pickup in market activity – there are two reasons for that; lower stock has hit up against an increase in buyer registrations as people realise there’s going to be a lull in the journey to Brexit and they have decided to take advantage of that,” she says.

“This has created a market and we’re seeing competition for the stock that is out there among these ‘get on with it’ buyers.”

Beeton says Hamptons International has also seen its sales drop-through rate fall by a third so far this year, evidence that – she claims – speculative sellers have been weeded out of the London market and that it’s now “more serious”.

“Another sign of the market coming back is that City luxury flats sales are beginning to return,” she says.

Online threat?

Hamptons International also has an ever-growing competitor both in London and the Home Counties to contend with – Purplebricks. Beeton says they and its hybrid cohort including Yopa and HouseSimple, have yet to impact her directly.

“Our market share has grown since the advent of the hybrid and online agencies and they aren’t a threat yet to our traditional model,” she says.

“But I am aware of areas where they have a really excellent local property expert looking after a territory, particularly if they have a traditional estate agency background, who are able to win instructions.

“What tends to happen is that these agents eventually leave because they realise that the model doesn’t suit their customers-centric ethic – the model just can’t do it.

“There are a few small geographies where they’ve got a good person and they are building a larger market share, but it doesn’t really impact us.”

Beeton makes the interesting point that if Purplebricks had come along at a time when the market was ‘absolutely fabulous’ and you could sell anything at any time without any experience or expertise, they would have had a much greater impact than they have, because the “current market does require experience and expertise,” she says.

“We ignore them at our peril, and must be respectful of them so let’s see what happens if the market picks up next year. No agent should be arrogant enough to think that Purplebricks can’t touch them.”

Proptech pause

One technology Hamptons International has largely ignored is proptech.  While many of its competitors including Savills, Foxtons and Hunters have sunk millions into either proptech or online agents, Hamptons has sailed on regardless, sticking to its wellies-and-notebook traditional approach to estate agency.

“Data is key to us both internally and to ensure our customers get the best service, and the more insights and information we can provide for them, the better,” she says.

“But we’ve seen a lot of proptech offered to us that has come and gone and cost quite a lot of agents a lot of money, but perhaps not made them a lot.

“Like online agents, there are some which are useful and some that will definitely enhance our sector and have done, but in truth from what I read, proptech seems to have come out with a bang and is now waning rather than waxing and we would certainly echo that.

“That’s not to say we wouldn’t use anything useful out there, but there is an awful lot which hasn’t had much impact, although it can be useful at driving efficiencies in lettings.

“But it can help on sales too – for example if a truly one-click solution to complying with the Anti-Money Laundering could be developed, I’d be interested to see it.”

But Hamptons International’s parent company Countrywide is unlikely to sanction any additional spend at the moment. It famously abandoned its tech-led, centrally controlled approach to sales and lettings, and its experiment with an in-branch hybrid offering was quietly shelved after former CEO Alison Platt left in January 2018.

Instead its new leadership team has been championing the virtues of a traditional, branch-led, roll-up-your sleeves approach, something Mary Beeton and Hamptons International are well placed to provide.

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