Tesco to sell property website
Published on 02/05/2008
According to reports on the BBC website, Tesco is in talks to sell its online property business to a chain of estate agents.
Tesco Property Market, which was launched in June last year, was seen as an opportunity for the supermarket giant to expand its interests. The venture offered a £199 service aimed at undercutting traditional home sellers.
The launch received a furious response from rival estate agents; some even took legal action to prevent properties that they were marketing from appearing on the Tesco run site.
A company called Spicerhaart, which is the UK’s largest independently-owned estate agency network, with more than 250 branches, was once one of Tesco’s most vocal critics. Now however, Spicerhaart look set to buy the business.
‘Wake up to Money’, the BBC Radio show, revealed that the plan is for Tesco to continue marketing the business while Spicerhaart will own and operate it.
A spokesman for Tesco confirmed that they had been reviewing the internet agency for some time and that a deal was in the final stages as they “explore ways” in which they “might be able to bring more value and choice to home owners.”
"Spicerhaart will develop a new and comprehensive online estate agency service and this will be available to our customers at Tesco.com," he added.
Paul Smith, the chief executive of Spicerhaart, also confirmed the business partnership with Tesco and spoke of his firm’s long term desire to develop a new innovative virtual estate agency.
"This business, which will benefit from our well established property expertise, will offer a high quality estate agency service. A further announcement will be made in due course," he said.
The original plan for Tesco’s new venture was to give home owners a “For Sale” board in exchange for their fee. Their customers then had the opportunity to upload photographs on to the website but were responsible for arranging their own viewings.
Criticism came from analysts who highlighted the fact that getting enough buyers and sellers on to the website was the key problem with the business model.
Rightmove and Findaproperty have already turned down similar approaches from Tesco citing the fact that they saw Tesco’s site as something that would undermine their own business as their reason for declining any opportunity for a partnership.
As a result of Tesco’s emergence in the property business a number of estate agents went to the Office of Fair Trading (the OFT) and requested that the situation be reviewed.
The OFT decided that Tesco would have to abide by all the provisions of the 1979 Estate Agency Act if it were to continue selling properties as it had planned.
Tesco then suspended its facility to buy and sell homes in October - including the DIY £199 option - pending a review of the property business that it bought in 2006.