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digital disruption in property portals and within estate agent industry

Property portal Zoopla has agreed exclusive partnerships with four UK property technology start-ups accompanied by £1m of investment as it seeks to diversify its offering in the face of increasing competition.

The deals, representing the first time Zoopla has invested in start-ups, are with Trussle, an online mortgage adviser; Landbay, a peer-to-peer mortgage provider; PropertyDetective, which provides data and reports on neighbourhoods; and FixFlo, a platform for requesting repairs in rented properties.

They are among dozens of “prop tech” start-ups in London that are aiming to bring the success of “fintech”, or financial technology, to real estate, and offering ancillary services across the sector.

“There are a lot of processes that are yet to join the digital age, and a lot of exciting developments in property technology. There are opportunities to take broken processes and improve them,” said Alex Chesterman, founder and chief executive of Zoopla Property Group.

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In the case of Fixflo, Zoopla has jointly invested with estate agents Countrywide and Connells. Trussle has also attracted investment from Ed Wray, co-founder of Betfair, in a £1.1m funding round.

Describing applying for a mortgage as “paper-heavy and painful”, Mr Chesterman said Trussle enabled the entire process to take place electronically.

Zoopla, which listed in 2014, is looking to bolster its position amid increased competition.

Its main rival is Rightmove, but OnTheMarket, an agent-backed competitor portal, launched a year ago and has sought to poach agency partners ,from the two market leaders.

All three sites charge estate agents to list properties, but OnTheMarket [OTM] founders say their site, was set up to combat what agents argued were excessive fees charged by the main two portals Zoopla and Rightmove.

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Many within the industry, say this is nothing more than an elaborate smokescreen .And that OnTheMarket, was actually set up to combat the rise of online agents; who fear their own [ high street estate agents ] market share will be lost .The on liners, have argued excessive fees, charged by high street estate agents ,is a broken business model and consumers demand more.

Zoopla and Rightmove both allow listings from, online estate agents on their property portal;Unlike OTM which has banned them.

The UK Government, is also a supporter of estate agents, embracing the online revolution ,with benefits felt by the consumers and wider economical uplift.

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OnTheMarket’s arrival prompted Zoopla to acquire the comparison website uSwitch last April, with the aim of becoming a one-stop shop, for residential property services online.

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The business climate continually changes with technology, the rise of online estate agents, a key factor, many say is why, was set up, as the large traditional corporate high street agents are losing market share to them.

London which many feel, is the key battle ground, where a recent report complied by rightmove, found there where more, traditional bricks and mortar high street estate agents ,than butcher shops, despite tepid UK Property Transaction Statistics

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Countrywide, the UK’s largest listed estate agency, said on Tuesday [16/02/16] that it had sold half its stake in Zoopla — amounting to 2.1 per cent of Zoopla’s share capital — for £19.1m.

Countrywide's, share price has also been in free fall, for the last 12 months.

And recent retail sales figures ,confirm more online drift ,making for a very uncertain future for CWD, compounded by a CEO, who has no experience ,within the industry.

Recent research also found , the UK is the capital within Europe, for online shopping by consumers

William Packer, analyst at Exane BNP Paribas, said the decision to sell at 220p, in line with Zoopla’s listing price, reflected the “sustainability of the new competitive 

equilibrium”, with OnTheMarket “here to stay”.

Zoopla has lost about 30 per cent of its inventory to OnTheMarket and has also been losing out to Rightmove, Mr Packer added.

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