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Property Marketing Turns to Technology
Paula Hawkins
There was a time in which the marketing of property involved little more than print advertising, displaying information in the window of the local estate agency and erecting a sign outside the property itself. But like so many other businesses, the marketing of property has been revolutionised by the internet. Today, property advertising is dominated by the web, with other multi-media channels, including text marketing and Bluetooth 'proximity' marketing, also becoming increasingly important.
Perhaps the most important development in property marketing in recent years has been the arrival of property portals such as Rightmove, FindaProperty and Primelocation which list the properties of thousands of estate agents.
The likes of Rightmove are still overwhelmingly dominant in the UK property search market: figures from Comscore, the internet audience measurement specialist, show that in July 2008 the site received just over 2.6 million unique visitors. Propertyfinder received 1.6 million, while FindaProperty received around 1.3 million unique visitors. However, these traditional sites now face a significant challenge from next generation portals such as Nestoria and Globrix, which was launched in January this year and which is backed by News International.
Online Property Marketing is Reported to be the Most Cost Effective Lead Generator
At present, these new sites are receiving just a fraction of UK traffic (Comscore puts their April unique visitor traffic at 500,000 for Nestoria and around 250,000 for Globrix), property marketing analysts believe that it will not be long before they are challenging the more traditional sites. Unlike traditional sites, Nestoria and Globrix do not list properties themselves: they are effectively search engines, like Google, which trawl the web for agents' websites, display the properties and direct users back to the listings on estate agents' sites.
While the new sites offer advantages for property hunters – they tend to be much 'cleaner' than most property search engines, as well as allowing for a much higher level of specification (you can, for example, search for a barn conversion should you so wish), the search engine model is particularly attractive to estate agents since it does not require them to pay a fee – by contrast, sites such as Rightmove charge agents up to £495 a month in order to include listings on their sites and others, such as Findaproperty charge a fee for each property listed. In a property market and general economic slowdown such as the current one, free marketing offered by these new companies will be a huge draw for agencies trying to cut marketing spend.
"traditional media outlets are now proving to be much less efficient than the internet"
In addition to next generation portals, other multi-media channels are also becoming increasingly popular with property marketers. Text services such as TextAgent combine the traditional advertising methods with new technology: buyers have to text a property code to a number displayed on a sign or leaflet, and instantly receive the property details on their mobile phone.
Bluetooth proximity marketing is another relatively new channel: agents can 'ping' lists of properties in their area to anyone who has a Bluetooth enabled phone, PDA or laptop. Bluetooth marketing has the potential to be extremely efficient: property listings will go only to those who are thinking about buying - the mobile phone or PDA owner has to say that they want to receive the content - and to those who are actually in the local area.
'PodAds', a form of video advertising, are another web-based channel which allow agents to give potential buyers a more comprehensive view of the property without actually going out to see it.
Video adverts from firms like Real Property Tours cost up to £600 depending on the size of the property and can be shown on websites, iPods and phones, as well as in the windows of estate agencies. However, the high production cost per property means that these are usually reserved for the visually impressive and expensive properties.
While technological advance is exciting for marketers, in a challenging market such as this one, agents and developers may be tempted to stick with what they know rather than trying expensive new media. Many agents are cutting marketing spends: Ivor Dickinson, managing director of Douglas & Gordon, this week said that his agency had cut its marketing costs in half by Christmas of last year in anticipation of a protracted downturn.
With marketing budgets tight – and unlikely to grow any time soon – the efficiency of various marketing media becomes critical. And the bad news for newspapers and magazines is that, relatively speaking, traditional media are now proving much less efficient than the internet.
A recent survey by TheMoveChannel, a property portal, shows that online marketing generates almost four times the enquiries as newspaper advertising. Furthermore, the results suggest that magazine advertising may be an indulgence that is hard to justify in tougher times, with leads costing almost three times that of online marketing.
Activity |
Average Cost/Lead |
Magazine advertising |
£43 |
Newspaper advertising |
£20 |
Online advertising |
£15 |
However, it should be noted that the simple generation of a number of leads is not sufficient to suggest that online marketing is always superior – poor quality leads are worth nothing at all and the trick is to ensure that online advertising and marketing is tightly targeted to generate enquiries that are relevant and convertible. It should also be remembered that print advertising can be beneficial for building brand awareness and generating instructions, but in a slowing market there is usually an abundance of stock and agencies tend to focus on lead generation.
Anecdotal evidence would suggest that marketers are wising up to the relative merits of the web and reaching an ever more relevant audience. While statistics showing the proportion of advertising spend that has moved from traditional to new media are hard to come by, print advertising appears to be suffering, as evidenced by the flimsiness of the property sections of national newspapers: whereas last year some sections were running at around 50 pages, those same sections are now closer to 15.
Some agents admit that they have ceased advertising in local newspapers and magazines altogether, and are now concentrating solely on web channels. Indeed a number of large, well known, agents are conspicuous by their absence.
Meanwhile, property portals have so far performed well. Last month Rightmove announced that first half revenues rose by almost 50 per cent to £37.8 million, while profits rose almost 60 per cent to £20.8 million. Ed Williams, the firm's managing director, linked the increase directly with the decrease in newspaper and magazine marketing, saying: "We enable our members to make big reductions in their print marketing spend, helping them to survive the drastic downturn in property sales".
The short-term future – and focus - of property marketing will to some extent be dictated by just how long this downturn continues, with analysts expecting the likes of Globrix and Nestoria to be among the main beneficiaries of a slower market.
In any event, the credit crunch has already focused the minds of many property marketers and there is no doubt that it has dramatically changed the landscape, both online and off.
Paula Hawkins
Paula writes on the residential property market for a number of national newspapers including The Times, Independent, The Sunday Telegraph and the Evening Standard
Criticism Over Government's Plans for Property
The stamp duty holiday announced by the Government at the beginning of the month has been widely criticised by the industry. The Royal Institution of Chartered Surveyors (RICS) was quick to point out that the measure would benefit only 1 in 10 buyers nationally (and a negligible number in London) and that the maximum deferment of £1,750 would hardly put a dent in the average £27,738 required by first time buyers to cover their deposit and fees. Similarly, question marks were raised over the Governments HomeBuyDirect scheme which was said to be small scale and of limited interest to mortgage lenders who prefer not to lend on shared equity properties.
The Government's plans for the housing market have come under criticism from most quarters
The stance taken by the British Property Federation (BPF) was that the measures did little to stimulate new development or deal with the massive demand for rented housing; missing the opportunity to introduce incentives to create a large professional rented sector.
Booming Private Rented Sector
ARLA, the Association of Residential Letting Agents, has reported that the rental sector continues to take up the slack in the housing market, with new tenancies up by 20% during the last 3 months. The strength of the rental sector is being seen as an opportunity by more than a quarter of buy-to-let investors according to Ludlow Thompson's latest survey which reports that 27% of landlords want to take advantage of strong rents and stabilising property prices to expand their portfolios. The RICS's latest Residential Lettings Survey painted a similar picture, with 39% of chartered surveyors reporting a rise in flats to let and 43% reporting a rise in landlord instructions. According to James Scott-Lee, spokesman for the RICS, "Becoming a landlord is now an increasingly profitable option, with rising rents and yields offering good returns."
RICS Reports Signs of Recovery
Despite the average number of transactions reported per surveyor falling in August, down to 12.7 over the previous 3 months, the house price balance improved slightly for the fourth consecutive month. 19% of chartered surveyors reported static or rising house prices, compared with 17% in July, up from a low in April of just 6%.
London “will not repeat Property Carnage of 1990s”
Speaking at industry conference, Offices 08, Managing Director of Corporate Finance at JP Morgan, Robert Fowlds pointed out; "The key difference to the early 1990s is that then, we lost 30 listed trader developers. I don't think we will see anything like that. I don't see the carnage." Panellists at the event, which focuses on the office investment market, agreed that the development of London's transport infrastructure is of vital importance in sustaining the capital's growth, but Toby Courtauld, Chief Executive of Great Portland Estates pointed out that while the likes of Crossrail were important, he remained "sanguine" about London's prospects due to the population growth expected over the next few years.
House Price 'Crash' Hyperbole
With wildly varying reports of house price movements, it's difficult to know what to believe, but taking an aggregate of data from Land registry data and local government figures, as well as indicies from the likes of Halifax and Nationwide, the Chesterton Poll of Polls reveals a more accurate picture. Latest figures show that London is holding up more strongly than the rest of the UK with annual growth in house prices over the year to June 2008 still standing at 6.4%. The small monthly fall in prices of 0.2% was one of the most benign out of all the regions. The average London property price was £342,542, reflecting a year-on-year change for the capital's house prices of -0.9%.
CBI Presses the Case for a Half Point Base Rate Cut
The Confederation of British Industry (CBI) has made the case for the largest interest rate cut in seven years to rescue the country from recession. Richard Lambert, CBI director maintained that the UK was "almost certainly in a mild recessionary phase" and that the slowdown would cool inflation, offering the scope for the MPC to cut interest rates. Lambert predicted that inflation would slow to 2.3% by Q4 2009 and that "there is a significant risk that in 2010 inflation will actually be undershooting the 2.0% target by quite a way."
London Predicts £44 billion Growth by 2012
Think London, the capital's inward investment agency, has forecast that the London 2012 games will boost the local economy to the tune of £4 billion. This is in addition to the £40 billion growth that the capital's economy is projected to see over the next 4 years.
Mayor Gives Backing to Wood Wharf
This month, Boris Johnson gave his backing in principal to the £2bn Wood Wharf development to the eastern edge of Canary Wharf. Outline planning consent is expected towards the end of this year, enabling the first offices of the 5m sq ft scheme to be delivered by 2010-2012.
New 45 Storey Skyscraper for Canary Wharf
Planners have given the go ahead for a new 1.2m sq ft office scheme on the western edge of Canary Wharf close to The Landmark development.
The scheme will include 11,000 sq ft of retail and restaurant space together with a dockside walkway and access to the Wharf's Grade I listed dock wall. The building at 1 Park Place will be one of London's largest office buildings.
Southbank Residential Development
Bank of Scotland Corporate has confirmed finance for the purchase of a 2.5 acre site on London's Southbank. Residential developer Native Land has secured the site for a mixed use scheme, to include a new fire station, housing and 50,000 sq ft of commercial space. Outline planning will be submitted in spring 2009.
City Airport Flying High
Flying in the face of predictions that the airline industry is in crisis, London City Airport carried a record number of 256,000 passengers last month (an increase of 6% year on year). The increasing appeal of the Royal Docks' airport is attributed to the recent investment into an extension to the departure area and new aircraft stands aimed at making for faster security checks and easier journeys. City is reported to have the slickest security checks of all UK airports making it particularly appealing to the business traveller. The airport hopes to further build on its success and has applied to Newham Council to increase its flight movements from 80,000 to 120,000 per year.
The Landmark is Rapidly Becoming Part of London's Skyline
With the structure of The Landmark West Tower (left as photographed) now at full height, it's possible to see the striking effect that the towers will have on the canary wharf skyline. Young Group has already received reports that the towers are visible from as far away as Richmond Hill and Crystal Palace!
©Jason Hawkes http://www.jasonhawkes.com
Rendall & Rittner to Manage The Landmark Estate
Following an extensive tendering process, Young Group is pleased to announce that Rendall £ Rittner, one of the capital's most respected management companies will manage The Landmark Estate.
The Rendall and Rittner team is now on board and is providing input into issues that will enhance the smooth running and ongoing management of the estate for both residents and commercial tenants once it completes in 2009/10.
A Landmark Interior by Design
In keeping with the modern, sleek design of The Landmark's exterior, the iconic development's architect - Squire and Partners - is refining interior concepts. The internationally renowned team has an exemplary track record, best demonstrated by the exquisite interiors and stunning exterior of The Knightsbridge at which Squire and Partners were the architect and interior designer. They will ensure that the prestigious exterior design of The Landmark is reflected in the interior, with design cues that flow throughout the development, right into the heart of the luxurious apartments themselves. The Landmark's kitchens and bathrooms have already been specified and the first are currently being installed.
Young Finance on the Mortgage Market
In recent weeks, many lenders have reduced interest rates across their product ranges and for the first time there are mortgages available at levels not seen since the start of the credit crunch over 12 months ago. With rates for residential mortgages now below 6.0% and a buy-to-let deal available at just 5.59%, Young Finance is working with an increasing number of clients to reduce payments on their existing mortgages and raising additional capital.
Young Group's Finance Arm Voted No. 1
Young Finance Consultant Jessica Hodgson has beaten a field of more than 300 to be ranked top advisor for the first half of 2008 by Thinc Assured Network Ltd.
The accolade recognises the volume of business generated by Young Finance and is a reflection of the service focused approach of Young Group's companies. Neil Young, Young Group's CEO, comments; "Mortgage finance was increasingly difficult to come by during the first half of 2008 so it's particularly satisfying to see that our clients have been able to access appropriate products through Young Finance. Furthermore, we're currently working with a number of lenders to develop exclusive access to buy-to-let deals to ensure that we can continue to be at the forefront of the market."
New Energy Performance Certificate Legislation
Young London reminds landlords that from 1st October this year, it will be a legal requirement to provide a valid Energy Performance Certificate (EPC) for all newly rented properties. The EPC and accompanying recommendation report must be available to prospective tenants, free of charge, upon request.
For landlords who require an EPC, Young London can arrange the service for £85+VAT through an National Landlord Association (NLA) approved provider. Once created, EPCs are valid for 10 years and in the case of new build property (completed after April 2008), the initial EPC is provided by the developer.
From 1st October, landlords will be required to make an Energy Performance Certificate (EPC) available for any newly rented property
Young London Launches Online and on the High Street
This week heralds the much anticipated launch of Young London's first high street agency office at myBASE1, supported by a brand new website (www.younglondon.co.uk).
Young Group clients and Young London tenants are invited to call into the office at 128 Webber Street, SE1 to meet the team and share a coffee.
Young Group specialises in providing Property Portfolio Management services to private investors; offering the best off-plan direct investment opportunities in London, as well as access to indirect, development fund investment opportunities through its development arm, Young Property. Young Group manages the entire investment process. For direct investments this spans from sourcing the opportunities through to financing, furnishing and letting.
Young Group owns all the property that it sells, and also retains a number of units in each development for its own portfolio. As the principal in every transaction, Young Group does not realise any profits until completion and has transacted in excess of 1,700 apartments, with a retail value of £700 million. The Group’s lettings division, Young Lettings, has successfully let the majority of investors’ apartments within a week of completion.
Young Group supports NORWOOD and CHILDREN with LEUKAEMIA, two charities particularly close to our heart, donating £50 per property exchange.
t: +44 (0)845 356 1000 e: info@younggroup.co.uk
