The news of CoStar’s £100m-plus acquisition of OnTheMarket should have every agent in the UK rejoicing at the prospect of a complete shake-up of the property portals, which could severely curtail the dominance of Rightmove and Zoopla.
For too long, we’ve all been held over a barrel by Rightmove which has continually raised its fees to agents, despite knowing the difficulties that everyone in the industry is facing.
With almost £130m profit in the first half of this year, an uptick of 7% from the same period last year, you might think there would be some empathy from Rightmove towards its customers during these turbulent times. But alas, that appears to be wishful thinking.
The market has retaliated, as evidenced by the immediate freefall of Rightmove shares by a stark 14.3% following the announcement. CoStar isn’t just any competitor; it’s a behemoth with deep coffers, immense technological prowess, and the experience of transforming Homes.com into a market leader in the U.S.
The promise of a £46.5m investment in OnTheMarket from a company worth almost $28bn tantalises us with exciting times ahead. I, for one, can’t wait to see if it will have a TV campaign and what it will look like, in the same way I look forward to the John Lewis ads at Christmas!
CoStar has multiple platforms including Apartments.com, and an extensive network of content creators, giving them digital dominance in real estate. They’ve mastered the art of ‘freemium’ — offering core services at no cost and then monetising through premium features or data selling.
If they adopt the same model here, we could be looking at free listings, which will make a huge difference to the estate agency sector. I’ve noticed a similar model has been introduced in Australia, through a company called view.com.au.
It’s a model used by everything from search engines to social media and software companies, and much more. The Googles, Amazons and Facebook of the world leverage intimate data, knowing more about us than perhaps our closest friends or even ourselves.
CoStar’s meteoric rise to global prominence is impressive. Its commitment to innovation, paired with its in-depth analytics expertise, makes it formidable. And with OnTheMarket’s history of taking on Rightmove, this partnership promises fireworks.
However, this acquisition prompts a cascade of questions. Will Rightmove, perhaps out of sheer survival instinct, finally reduce its fees? Or, in a drastic pivot, make its platform free? As CoStar rebrands or repositions OnTheMarket, how long will it take to topple the existing hierarchy in search engine rankings – or might it even start up its own agency? Given the vast pools of data both portals are sitting on, the potential integration of advanced AI could revolutionise property searches.
And let’s not forget about Zoopla and the other portals who’ve been tossed into this turbulent sea of uncertainty. Their fate remains a tantalising question mark.
CoStar’s entry isn’t just about a business deal; it’s about challenging the status quo, redefining industry norms, and hinting at a future where agents might finally breathe a little easier.
This isn’t just business; this is the property market getting the shake-up it’s been crying out for.
Paul Smith is executive chairman of Spicerhaart
EYE Newsflash: OnTheMarket takeover confirmed as CoStar Group bid accepted
Be careful of what you wish for! Costar isn’t a charity.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Real competition will be welcomed by agents provided that buyers/tenants can also be persuaded by the offering. Undercutting RM is only part of it, but let us indeed rejoice if this development proves to be their comeuppance.
RM richly deserve the indifference agents might have to their immediate future after years of naked greed, but I suspect the coming transitional period will be challenging !
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Homes is not a market leader in the USA….
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Hopefully they rebrand and change the name. ‘On the market’ is a term, not a name for a portal. ‘We list you property on on the market’, it just doesn’t work. Great time to rename it and relaunch, a better name with the clout they had at the start with might just have made it.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Why should a business reduce their fees when costs are spiraling? Have Spicerhaart reduced their agents fees to customers to help the struggling public?? No, didn’t think so! In fact, they have put them up! Funny that.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Well said. it’s what the industry needs. With jason leading the way with his agency and industry knowledge OTM will have a good chance to further flourish with costars backing and power
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Its the shakeup we all needed.. Big congratulations to OTM.. looking forward to seeing what’s in store !! Exciting times .
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I am very much looking forward to how this plays out. RM have enjoyed a position that has allowed them to take a forceful attitude to their pricing that we have all be desperate to see challenged for quite some time. Some of us were brave enough to leave them several years ago to show our displeasure at this approach. Had all agents have been brave enough to make a leap then things would be very different now and control would have already shifted, so I appreciate that CoStar are no charity, but given we didn’t all take the chance when we could this might be our best shot at a more even playing field helping a change of attitude, reminding us all that such a type of attitude curries no favour in the long-term and of that age old adage of ‘the toes you step on today….’
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Be careful what you wish for…
I recall a time when complaints about the high cost of Sky TV were common, as it held a monopoly over the TV market.
Yet, today, many of us willingly shell out far more than our initial Sky bills to subscribe to multiple services like Netflix, Prime, Amazon, DAZN, Disney, Apple, and more. Ironically, we now face the inconvenience of juggling various subscriptions, with our desired content scattered across different platforms.
In this landscape, RM offers exceptional value, at least in my opinion.
Its effectiveness has made it a highly profitable business.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
First step: They are in it to make money.
Second step: They will have to spend money to hit the status quo.
Third step: Status quo will not have to do anything until it starts to hurt.
Fourth step: If it becomes a free for all, on fee’s (wishful thinking) they will have to spend more money to maintain momentum. Where is that money going to come from, for them to make a profit???????? This could take years.
Fifth step: The big supporters of the status quo control the industry? Yes, that is why they can continue to maintain the status quo and not on OTM. You would need them to switch allegiance ….. oh yeah!
Six step: You have to convince the market i.e. the customer to switch. They don’t give a damn about inside industry fighting, they are not paying for the advertising. As once said, vendors pay a fee but leave it down to the agent where they advertise and historically that is all about how the agent sells their service/marketing. A very big problem to make waves into the status quo and many an agent has refused to leave the status quo, in fear of vendor rejection.
Step seven: More than a few people are very happy, financially for the move in OTM, now who would that be? But show the evidence that CoStar can deliver and make a profit, without increasing fees and worst …. become a bigger nightmare.
OTM flourished from the creation of like minded agents, who saw the chance and need for change as a mutual. They created OTM by their participation/support. They convinced their customers (as for all property portals) on a daily presence, not from the scant media advertising by all.
OTM has not been a mutual for a long time and sold out. Only time will tell if CoStar will actually make a difference in-line with what mutual agents were hoping for back a few years ago.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Apart from brain cells, I must be missing something.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
“This isn’t just business; this is the property market getting the shake-up it’s been crying out for.” Didnt we say this several years ago when OTM was formed???
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Booming good news !!
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Agents have always had the power over RM, but they are too scared, if everyone got together in their local area and approached RM for a reasonable fee, they could achieve it, RM are nothing without stock.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Rightmove have many agent over a barrel with staggered contract dates and various discounts, this is why agents cant stick together… negotiating a reasonable fee just wont happen, leaving is the only answer… the independents are the ones that are subsidising the corporates and larger agents. This takeover of OTM is yet another opportunity for agents to break free from Rightmove the last two chances were missed maybe this time the penny will drop and agents will win the third time lucky.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register