The Rise and Fall of Online Estate Agents

This month’s blog is about how to focus on the truth and not get swept away in hyperbole… not always easy in today’s world!

Throughout 2016 and 2017 the property pages were awash with news about Purple Bricks and co – the new breed of ‘online estate agents’ who were going to change the way residential property is bought and sold, forever. Companies like Purple Bricks and Emoov were touted as the future, amidst rumoured valuations in the hundreds of millions, while traditional estate agencies were labelled soon-to-be things of the past.

At the time it was disorienting to be reading this in the news, and as the market was flat anyway (mainly due to geo-politics), it was easy to wonder if the press, and the people behind these websites, were in fact calling it right. The sheer level of news on the subject could feel convincing at times.

On closer inspection however, it was not such a clear picture. And among our network, questions arose about the business model of these new brands. We decided to do our own due diligence, and as a result felt vindicated recently when Purple Bricks was marked down by 80% and given a ‘sell’ rating by investment bankers. This was after the other major player, Emoov, was placed into administration late last year.

Here are our three key learnings from a time when our whole industry and livelihood was questioned, by the kind of hyperbole not seen since the first dot com bubble:

1. Trust your gut… and consult your network:

When something doesn’t seem right, often it isn’t. We got together with our peers to discuss the real nature of the threat from online agents. Pretty soon (as documented in our blogs with Homes One and Winkworth last year – we worked out the absolute minimum viable product needed to sell a house, and the online agents looked hopelessly unable to fulfil such a responsibility, on even a micro-local basis, let alone the type of global scale they were prosthelytising about. There is only one way to sell large numbers of houses on peoples behalf – and that’s by having robust teams of experts who are capable of doing so. Websites and online activity can help to find buyers and sellers – but they can’t transact by themselves. For that you need a human being who is able to address complex needs on both sides of the equation, and provide the correct market knowledge to support the completion of high value, once or twice in a lifetime, transactions.

2. Businesses need real business models:

If you can’t see what the business model of a new idea or brand is, the most likely explanation is there isn’t one. With the online brands, common sense told us that this new phenomenon – rather than being a cost saving way of selling your home – was in fact an exorbitantly expensive way for you to advertise your home online, on a deficient platform. And that once vendors had been ‘stung’ once, they were highly unlikely to return, and add another four figure fee (in return for nothing) to their house sale process. Time has proved that very few houses were actually sold via the online model, and that many vendors ended up instructing traditional agents, once they’d been fleeced for the listing fee. Happily, that means that those of us who love what we do and enjoy providing an excellent service to our clients, are now well placed to so again – and the sale process for vendors is thankfully less confusing than it was a year or so ago.

3. Things change gradually not suddenly:

We are reminded that generally speaking, big changes happen incrementally over time, rather than rapidly and dramatically. Of course technology is here to support us all in doing business more efficiently and effectively. However with something like the sale of a house, which is usually complex on both the financial and emotional levels, it will never replace human intelligence and experience. With the advent of prop-tech, we are seeing better funnels and distribution channels, which enable people to connect with their dream home more easily, and sellers to find the right buyer at the right price. We see that match as being the key role played by technology. Once the connection is made, humans take over to conduct the transaction in an appropriate way. Over time, we estimate that technology will become extremely good at the former piece of the equation, and agents will continue to become better at what they do as the property wheel keeps turning.At Nicolas Van Patrick, Homes One and Winkworth, together with our peers, we look forward to continuing to provide an excellent bespoke service to our clients as these twin paths unfold together – with our clients needs and wellbeing the first priority.

A selection of the best property stories this month:

Property millionaires falling in UK:

Mansion Global

But £15m+ super-prime sales surging:

Mansion Global

New mansion tax for Kensington & Chelsea:

Evening Standard

No need for foreign buyers in the super-prime market:

Business Times

Join the Beckhams in Dubai:

Over-customised homes are harder to sell:

It’s a buyers market in the mountains – and great snow too:

Multiple super-prime purchases for one buyer, in NYC and London:

And finally… vegan penthouse for sale in west London:

Property millionaires falling in UK:

But £15m+ super-prime sales surging:

New mansion tax for Kensington & Chelsea:

No need for foreign buyers in the super-prime market:

Join the Beckhams in Dubai:

Over-customised homes are harder to sell:

It’s a buyers market in the mountains – and great snow too:

Multiple super-prime purchases for one buyer, in NYC and London:

And finally… vegan penthouse for sale in west London:

Brighter Days

Here at NVP, as we ease our way into February, we are feeling grateful. Despite the flat market, we are looking back on our best year yet, and we wanted to share a few insights with you that are making the difference. Everyone in property right now is being tested by market conditions and political uncertainty. But our attitude is: why not work together and share ideas openly, as we find our way through this unfamiliar territory?  Here are a few of our thoughts on the matter, as told to a colleague.

You’ve just had your best year yet. What’s behind that?

Patrick: We do our best to ban all talk of market conditions, and where possible, politics too. Both these things are toxic subjects that can suck the life force out of a team, if things are unstable in either context. Far more important than either of these things are the conversations we are involved in, right here and now. The minute the ‘cultural narrative’ supersedes the importance of these interactions, and starts to colour them in some way – we’ve know we’ve lost our way.

Nic: In the NVP partnership, Patrick is better than me at shutting these things out. He drives the sales culture in the business, while I focus on managing the affairs of the company as we grow. I guess that means I am more aware of what is happening economically or in our sector, however I agree with Patrick that it’s very important not to let talk of these things distract us from the main thing. So together we try and focus on selling and renting properties in our local area – and nothing else, within reason!

That said, what are your thoughts on the current climate in both areas?

Nic: The government’s main job is to maintain and drive positive economic conditions. In turn the whole country then benefits in a myriad of ways. But currently the government is mired in a four-year red herring, aka Brexit, and as such there is no wind in our sails – the economy is in stasis. The only constructive response is to shut this part of the story down, and to stop wasting energy talking about difficult market conditions, and hope the government is nearing a solution with Brexit.

Patrick: Time invested in these activities means time spent away from the frontline, which is where all the low hanging fruit is… and in times like these, those fruits offer essential nutrition. Awareness and personal responsibility, rather than playing the blame game, mean you don’t miss out. But it’s not just the easy pickings – there are bigger deals to be had. The market is quiet but it’s not dead, and especially not in super-prime deals – large properties with £20m+ price tags still represent good value as so many of them have seen big discounts since the top of the market. Added to which if you’re buying in a foreign currency just now then sterling is weak – so this counts as an additional discount. Just those two factors combined could see real gains for some buyers over the coming years, despite the adverse conditions. You have to know what to look for.

You’ve grown your business every year since you launched, and in some of the most difficult times imaginable – how have you done this?

Patrick: I believe we have benefitted enormously from being clear on two things – who our customers are and who we are as a business and brand. One of the reasons we have done well this year is our situation is in super-prime London, and we have tailored our efforts towards those customers with greater clarity. I wouldn’t want to be in any other area of the market just now.

What are the key factors in servicing a super-prime audience?

Nic: Local knowledge is key. It’s really obvious to anyone looking at a house if the agent accompanying them has real local knowledge or not. Patrick and I have grown up servicing this area, and Johnny our head of sales literally knows the floor plan of 80% of local properties – he has sold a property in so many buildings in this area – and sometimes every property in one building. You cannot buy that type of experience, and it takes twenty years to learn it – or more. People will always pay a premium to get that level of intelligence.

Patrick: I think people in the super-prime market also respect traditional values, where handshakes and eye contact, and good conversations, are important. We’ve tried to ensure these things are present throughout our company culture, in all departments of the business. Added to which we now have our dream premises, which are consistent with our brand, in which we can host people and give them a space to relax in, after the exertions of central London. People walk in, exhale and say ‘wow’. None of this is rocket science but what we are experiencing is that many things that have always worked, still do.

What else has supported your upward trajectory in difficult times?

Nic: We tripled the size of our rental business in the last two years, and plan to keep scaling up. Lettings and management can be very good insurance against the volatility of deal making, and we’ve been lucky to build on our own original team, as well as acquiring a new book to add to the mix, not to mention consolidating local management and lettings knowledge in our area.

Patrick: Life as a tenant has improved and as we’ve blogged previously, longer-term rentals are now seen as a viable alternative to buying. As such we are looking for further acquisitions of this kind and plan to keep expanding. While the market is quiet, it’s a good time to research and develop new opportunities to grow our business. We’ll be ready when things start improving. I doubt we’ll see a return to the bull markets of the past, with all the new diligence and regulation, but things can’t continue as they are and it’s our job to prepare well for the good times to come.




Five Things We Learned from a Wise Man.

Christmas is a good time to reflect and ask ourselves where we get our inspiration. NVP’s investor, the Dutch businessman John Fentner Van Vlissingen (known respectfully at NVP as JVV), visits our offices in Montpelier Street periodically throughout the year, as well as keeping in touch by phone. He has been a part of the business from the outset, providing seed capital, and assisting us with strategy and further funding as we grow our company. As one of his niche investments, we are privy to a wide range of advice, and the vast experience he brings, in all matters surrounding NVP. John is the most successful, and one of the nicest people we know, and we are indebted to him for the support he has shown us. We wanted to share the key things we have learned from him, to remind ourselves of the great value of this partnership, share inspiration with friends in our network, and say thank you to John, as we approach the end of the year.

1.    Be autonomous

We are always inspired by JVV’s story, in which he had the opportunity to join a successful family business, but chose instead to go it alone. In doing so he was able to build a wide portfolio of investments, and grow them into market-leaders through his own approach and using his own voice. We met John when we were working inside the corporate machine, and his advice to follow our own path was some of the best we have been given, providing us with the self-belief and confidence to both take the initial leap, and weather several storms since we launched our business and became entrepreneurs. We experienced first hand John’s mantra of ‘freedom within the boundaries of responsibility’, in which he affords the people who run his businesses unusual levels of autonomy to make decisions and steer the ship. One of the first things he said to us when we shared our idea was ‘You’ll have to be brave, but wait a few years and you’ll reap the rewards’. John also taught us that in business you need to work hard and have some luck, and that the harder you work, the luckier you get. These insights soon became guiding principles for the way we run our business.

2.    Fly economy

We are guided by the fact that John, whose companies turn over tens of billions, still resists extravagance and exudes humility in everything he does. During the recession, John’s travel company decided that all staff would fly economy to save costs. John followed suit, including himself in this principle, and switching to economy during these tough times. This story inspires us to keep a close eye on our costs and keep our feet on the ground. Working in central London property, especially around Knightsbridge, can be mesmerizing. The people and sums of money involved are often a heady mix, and it helps enormously to see the principles that still govern John’s approach to business, even when leading thousands of employees. He remembers people’s names, invests authority in those around him, puts his faith in people, and walks his talk. These approaches help us to stay centered in what can be a volatile and deal-centric industry.

3.    Counter-intuition

Thinking against the grain is one of the main lessons we have picked up while working with John. When he invested in NVP, the trend was towards industry-wide consolidation, as businesses like Foxtons and Marsh & Parsons opened multiple offices across multiple territories, standardizing the levels of service being offered and driving a sales culture throughout their businesses. Conversely to this approach, John agreed with us that a gap existed for a boutique agency to specialize in the golden postcodes, delivering a very high level of service to premium investors. We wanted to play a smaller game, at higher prices, and thus maintain a strong margin through alternative tactics. JVV agreed with us, and has since supported our views that technology will never replace the highest levels of customer service (see our blogs this summer predicting the collapse of Emoov etc). As we clearly state on our homepage, handshakes are more valuable than clicks, and maintaining this perspective amidst the hubris of the online brands, has been the result of the counter-intuitive and counter-cyclical thinking we learned from John.

4.    Feed the baby

Family values are important to everyone at NVP, and John has always encouraged us to treat our business like our baby, and to see that it is nourished and protected accordingly. This means doing things at the right time, not taking on too much for the business to handle, and trusting that if we nurture in the right ways, nature will take care of the rest. Bit by bit the business has been ready to take more on, and after a period of successful integration following our first acquisition at the end of last year, and moving into our new premises in spring, we are preparing for further activity of this kind in 2019. Aside from growth through acquisitions, John has always impressed upon us that the trick to success is having a successful team around you. The right people are key to growing your business in the right way, just as the right parents, godparents, teachers and guides are key to raising your child.

5.    Play the long game

‘Always be prepared to walk away’ is a mantra of ours we do well to live by, and which we learned from John. Whether buying or selling houses, or buying or selling businesses, you make a fair offer based on your own reality, don’t try and undercut or price others out, and trust that if this isn’t the deal for us, the right one is just around the corner. Staying connected to the bigger picture enables us to play a long game, and remember that we love what we do so much that it doesn’t feel like coming to work. John told us that he invested in us because we are emotionally connected to what we do, which to him means we have the energy needed to navigate challenging times. We believe this is true, and as such we both see NVP as a 25-year project – so two decades to go! We are grateful to John for being such a huge part of that journey, and for all the support, trust and wisdom he has shown us from the outset.

Happy Christmas from us all at NVP!

Supply and demand in prime residential London property

We thought we’d share the following observations about supply and demand and the current stage of the residential property cycle – in which ‘the inventory factor’ starts to influence buying habits.

What is the inventory factor?

Patrick: The inventory factor, as we call it at NVP, is the final part of any downturn. There is so much talk at present about geo-politics, Brexit, stamp duty, new regulation and industry cycles. All of which have a part to play, of course. But inventory is traditionally decisive in almost any industry and we are reaching that point in the current cycle when low levels of stock represent opportunity and movement.

Nic: To a certain extent, property in the postcodes we specialise in is always a rare commodity, so it’s not like we ever expect prices to plummet. However, inventory is a factor with any business, and of course it makes a difference if you have five buyers fighting over one house, or one buyer choosing between five. While we are not there yet, this factor is starting to show again, as levels of stock decrease and capital values are down. With the depreciating pound it means people are alert to the possibility of a getting a good deal, and we are seeing activity as a result.

What are the characteristics of this stage in the market?

Patrick: At the peak of the market, there is a dearth of stock around, and all at a high price – a high turnover of product, with new properties coming on the market all the time and being sold rapidly. After the aforementioned factors, in a recession, or period of quiet, often what finally swings investors back into action is the opposite – a scarcity of stock.

Nic: When the market falls away, prices drop and it takes a while to run the inventory down. People are unable to wait for the right time, and are forced into making their move at reduced prices, for a variety of reasons. Because of this, gradually stock levels decrease. Prices eventually start to go up again due to a lack of supply – and especially in prime central London, a high base in terms of demand.

Is this what is happening right now?

Nic: A low inventory drives the premiums up on new stock, and raises the price of property that is already on the market. As we wait for new stock to come on, there are simply more viewings and viewers per property, increasing interest and competition. This encourages people who are on the fence to make a move. As such, there is less procrastination and more risk, and activity levels rise. It feels different than earlier in the year, more lively.

Which is more influential on the London property market, the inventory factor or Brexit?

Patrick: They are both important, and both a part of the cycle or season the market is currently in, which is a highly unusual situation that has gone on far too long. We’ve been in an area of low pressure for years, beginning with the recession, followed by a short-lived recovery from 2010-14, then the uncertainty of Brexit. Right now, though, we are having our busiest autumn of the period in question. The confluence of an impending soft Brexit and inventories running low, may well see an upturn in the near to near-ish future.

What happens next?

Nic: People who need to sell their home, but not urgently, will hear about prices beginning to go up and consider making their move. Buyers who are hesitating and browsing will realise that the market is moving again and now could be the right time to get a good deal. Brexit will obviously impact this, and whatever deal transpires will be scrutinised and the market will reflect people’s emotional response.

Patrick: A soft Brexit would be good for London property whichever way you look at it. Obviously it will take time to ratify, however the first movers can take advantage of the above dynamics, so once it is through the cabinet we may well see things start to turn, with new stock coming on and buyers, who don’t want to pay sky high prices in 2-3 years, responding.

The NVP Partnership

Having recently celebrated four years of being in business together, we thought you might like to know a bit more about us, and what we think makes NVP unique, as told to a colleague…

You’ve worked together for fifteen years, at first in a corporate environment and next in an entrepreneurial capacity. How has your relationship evolved in that time?

Patrick: Well, first of all I think we are great mates and that’s why this has worked. It means we support each other and allow the other to be fully themselves. I’ve enjoyed seeing Nic evolve into who he is today, he’s changed a huge amount in fifteen years and it’s fun to support people through growth and change.

Nic: It’s always worked because, although we are similar in many ways, our working styles are very different, and we play to each other’s strengths. Patrick is very outwardly focused, he has market information on-tap, endless anecdotes, and some of the best intel in the industry. Whereas I know what’s going on in the business and focus more on our own structures and partnerships. That polarity works well.

Patrick: That’s right. For me it’s been a free flowing experience, very day to day, whereas Nic is more strategic, he thinks long-term and plans for the future.

Nic: Yes, that feels accurate to me, I hold the vision for the company and ensure that the commercial infrastructure is robust enough to cope with that vision. Another way of saying I’m more structured and controlling! It’s been an adventure for both of us – a constantly evolving, learning journey.

How was it making the move out of a larger business and setting up on your own?

Nic: We spoke about it for a long time when we worked at Douglas & Gordon, then one day I met an investor and, shortly after the conversation, we got serious. As soon as we realized we could do this where we wanted to, on our home turf in Knightsbridge, we didn’t bat an eyelid. A year later we opened our first premises on Montpelier St.

Patrick: We were top performers at our former employers and we always knew that we could sell houses, and lots of them, near the top of the market. I let Nic lay the foundations and he still does the same. I’m either on the phone or doing viewings, it’s all about deals for me. Nic is the business builder.

You speak five languages between you, how does this support the business?

Patrick: I’m Spanish and Nic is Italian/Austrian and that means we have good southern European banter, not just with the European crowd but also with the Middle East and South America. I also grew up in Knightsbridge which is a very cosmopolitan area containing a huge diversity of cultures. It gives me a root connection to long-term home owners and investors in this area. Knightsbridge is home to many great business people and, like us, they focus on quality relationships rather than clicks and websites. This means we riff with the local community on a daily basis, in nearby places like Abd El Wahab, Maroush and also Carpo for coffee, and that supports our sales funnel as much as anything else!

Nic: Agreed, maybe it supports us somewhat less than it did before Brexit, when more Europeans were buying in London, but I think that will come back. More broadly though, as Patrick says, I think our Mediterranean roots give us a great sense of elasticity in terms of relating to our customer base. I grew up in South America and Italy, and now London is my home, so it’s all the same to me.

What are the core strengths of the business?

Nic: We are specialists in this areas and our local knowledge is second to none. People all over the neighborhood refer to us for advice whether or not they are buying or selling and that gives us a certain position in the market that is human, visible and real. People appreciate that these days, when so much happens online. The preservation of traditional values is important to us.

Patrick: I agree, and I would add that we really love what we do – which is maybe because of what Nic said. We have so much human and social contact, and relationships are important to us. Because of that we don’t feel like we are coming to work, we laugh a lot and we gel as a team. I think, too, that the recent investments we have made in buying another business and moving to our new premises, have upgraded the NVP brand further towards the top of the market.

What does the future hold for you?

Nic: First of all, along with everyone else, we need to wait and see what happens in the geo-political situation. We’ve grown a lot in five years, throughout some very uncertain times, and we are now in a strong position having strategically laid the foundations through our merger. We may continue to make similar moves, and perhaps acquire other rental books as the opportunity arises, as we have the infrastructure to accommodate this. We will also diversify by increasing our depth of knowledge and reach in and around the Knightsbridge area and the rest of the Royal Borough.

Patrick: We’ve established the vessel we wanted and I can see us continuing in this vein for twenty years, if not more, and bringing in the next generation of people who will run the business when we eventually step back. It’s exciting being in a business with no glass ceiling, and trading in a neighborhood that supports the realization of that potential. I know I speak for both us in saying there’s nowhere else we’d rather be.

NVP: new website completes transition phase

In Montpelier Street we are celebrating our fourth birthday this month.

And although these are some of the most challenging market conditions we can remember, we just had our busiest August so far. After a quiet spring, as soon as the heat wave ended in late July business picked up.

Our newly published website completes our transition into the next phase of NVP’s development.

Take a look here:

Since August we’ve seen five prime residential properties going under offer at NVP, all within walking distance of our brand new Knightsbridge premises. In addition, rumours abound of two deals being done locally at eye-watering sums (£60m and £160m), the likes of which we haven’t seen for a while.

While doing the lion’s share of our deals in Knightsbridge, Chelsea and Kensington, at the top of the market, we are conscious of being ring-fenced against wider market conditions. In our neck of the woods, selling one large townhouse equals a good month of business.

We are grateful to service the clientele we have specialized in for so many years, between our team.

In our new and expanded premises, just a few doors further toward Harrods from our original base, our team has doubled in size following our acquisition of Hobart Slater at the turn of the year, meaning these days we are spread more evenly over property management and lettings, as well as sales.

This means as a business we are no longer so deal-centric (although our sales capacity has also doubled), with a significantly larger property management portfolio to look after. In turn, this allows us to increase our focus on customer service, and provide our clients with what we believe to be truly impartial advice as they wait to for the right opportunity.

At NVP our intention is to bridge the gap between buyer and seller, cycle to cycle, and across all the locales in the Royal Borough. In an era where clicks are replacing handshakes, these latest elements of our developing business are hopefully symbolic of our commitment to traditional values, and to giving our clients and partners the best possible service, both online or in person.

If you are in Knightsbridge anytime soon, do drop in and see us for a coffee. We are always ready for a prime residential catch up, and love to welcome friends old and new, to our new HQ.