The internet-only or hybrid estate agent business is “fundamentally flawed”, Connells said in a statement, as it announced Hatched has been closed to all new business.
The group added that its main commitment is now to its high street operations.
Connells’ aim is to retain or redeploy Hatched employees elsewhere in its business.
The online estate agent was bought by Connells in 2015 to be run as a separate company to the high street agency.
Over the past three years, Hatched received a programme of investment including new head office premises and the doubling of its team of staff.
But it found the business was not economically viable, according to Connells chief executive David Plumtree (pictured).
Customer experience significantly lacking
He said: “We have thoroughly tested the hybrid model and have reached the conclusion that it does not produce a viable economic result – evidenced by the results of those operating in this sector – and with the cost of customer acquisition being one of the main barriers to being able to deliver a profitable return.”
“There is much talk of disruption from hybrid estate agents, but from our experience we have found it significantly lacking when compared with the level of customer service, support and expertise that our high street operations provide.
“Ultimately, an upfront fee obligation – payable irrespective of whether a property sells or not – is not the right solution for the customer.”
Plumtree added that Connells was equipped to take decisive action when something does not work commercially.
