“Together, we’ve built something that can really fly. So get on board.”
Those are the words of successful entrepreneur and founder of easyProperty, Robert Ellice. Having already placed Inspired’s Impact House on easyProperty’s books, we couldn’t resist asking the businessman more about how he got started, his relationship with Sir Stelios Haji-Ioannou and the state of the industry today.
1. You’ve compared the workings of easyProperty to taking a car apart and putting it back together again. What did you mean by this?
It all started when I came up with several ideas when buying cars. I went to purchase a mini, and realised that you only get the basics, and everything else is personalised. It got me thinking about the estate agent service, and how there’s no choice for the consumer. The only thing you get is a bundle of services based on a property price, which is irrelevant to the service that is offered. We looked at how house rentals and house sales work, broke it all down, and devised a way which gives people options. We found a way that saves people money, makes more sense and is far more efficient. I have been an estate agent since I was 16, but I don’t think there will be many left in ten years time. With my ideas, I managed to persuade easyJet billionaire Stelios Haji-Ioannou to offer his “easy” brand to a new online estate agent. That is how easyProperty was born.
2. You describe yourself as the new generation of estate agents – what was wrong with the old one?
Lack of choice, it doesn’t fit in with today’s way of life, and the old version is far too expensive.
3. Could you explain the pricing model of easyProperty?
We offer three packages. One and two are largely the same, apart from that number one is split into marketing and sales progression, and the consumer can either opt for both, or simply one part. Marketing is priced at £425 and sales progression at £400. Alternatively, bundle 3 is a premium service where we offer additional elements such as viewings, printing brochures and premium listings for a total cost of £1500.
4. Could you tell us a bit more about yourself? How did you first get into property?
My family partially had a property background, and all of our friends were either developers or investors. I liked the lifestyle they led and they were interesting characters, so I decided it was the career for me. I got a surveying degree, and then went to work for an interesting company in East London as a graduate surveyor. It wasn’t long before I spotted some simple mistakes being made, so I approached the partners, raised my concerns, and at 22 years of age I was put in charge of running two branches. It involved the management of 15 staff, and moving around the business from estate agency, surveying, development and investment.
I then decided to leave the company, and set up on my own. I bought and sold some properties, made some money and then ultimately, I got bored of working by myself. I started to lose my drive and wanted to get into a faster-paced environment. So, at 27, I purchased a surveying practice, employed 14 staff and I still own that business today.
That led me to what eventually became easyProperty. I was doing consultancy work for Stelios while he was trying to buy more hotels. I offered my expertise, and asked him for the ‘easy’ name to launch a new business. He agreed and we licensed a deal that will last a minimum of 20 years.
5. What was the best bit of advice you received or the best lesson you have learned?
The last recession was tough, and I think most property businesses got very close to the edge. Probably the best thing I did and learned, was that no matter how bad it gets, you always protect and shelter your staff. During that time, we never made anyone redundant and we never put anyone under pressure. I gained an understanding of how to act normally and positively, which is the best thing a boss can do.
6. What’s your opinion on the current housing shortage?
We have got to forget planning! It’s restrictive, it takes too long and there’s a lot of stock that could be released if we started looking at brown field sites in city centres. It’s the next step from permitted development and ultimately, developers need to be able to build.
7. Do you think the buy-to-let sector is dead?
I believe that the way in which it has previously been run is dead, but it is not dead as a medium. The days of a free market in BTL have gone, and the truth is that in some areas it had become unprofessional. We need to control the quality of supply, and I think that is what is being done. However, we do need to find a way to allow individuals to maintain a pension, as having a portfolio is the best way to secure your future. I’m not sure how the government have approached it has been the most suitable way. However, crowdfunding into the BTL sector is a great way to allow people to invest with less risk and remain professional. In essence, it creates more opportunity.
8. easyProperty famously secured £25 million worth of funding in a very short space of time. How did you manage this?
Since launching, we have actually raised £39 million overall, and the company is valued at £100 million. Having the brand certainly helped, but also getting the right managers and corporate advisers in place was key. Chrystal Capital were brilliant, and they accessed people who were interested in this type of business. We went with ultra-high-net-worth individuals at the start, and then raised the last £25 million from a mixture of existing investors and Toscafund. We met some incredible people on the way, and those who we didn’t initially work with are now having the chance to get involved as we expand into the US and Dubai.
9. How have you started 2016?
We have marked the start of the year by launching a Land and New Homes division, as well as introducing the ability to exchange contracts online. We are also launching the first ever purely online property auction in a few weeks time.
10. You’ve previously suggested that you are in no rush to the market, and that you are delaying the outlook to list and are putting an IPO on the back-burner. Why?
We probably will go public at some point, and we had actually planned on it for this year. But now with Toscafund, there’s no need. They support us, and are keen to back the company as much as possible.