A new report on Rightmove has advised investors of ‘signs of cracks’.
Analysts at Berenberg bank have reiterated their ‘sell’ rating.
The Berenberg report comes after Rightmove’s half-year results were published last week, showing 10% rises in profits and revenues.
However, says Berenberg, “the headline numbers mask what are starting to be worrying underlying trends.
“We had noted at the full-year results in March that a business model so reliant on increasing prices is unsustainable – eventually agents will be forced to either leave the platform or close down. This is exactly what has happened in H1 2019.”
It says that 3% of agents’ branches have parted company with Rightmove in the first six months of this year, with the site itself expecting the trend to continue.
Berenberg says: “Rightmove will need to push through larger price increases on those that remain.”
But, it continues: “In our view, there are structural and competitive concerns for Rightmove, and agents will continue to vote with the feet whether voluntarily or through going out of business.”
Berenberg says it is “not a crazy assumption” to make that the agents who stay on Rightmove will be less receptive than usual to price increases.
Agents are suffering from “numerous” headwinds such as pressure on commission rates, over-supply of agents, and the lettings fee ban.
Berenberg says that Rightmove also now has stronger competitors in both Zoopla and OnTheMarket.
Zoopla now has “materially more firepower at its disposal” after its acquisition by Silver Lake, while OTM seems to represent the whole of the property market while charging far less than Rightmove.
Berenberg believes Rightmove’s valuation “does not reflect the difficulties that its estate and letting agents are experiencing and the impact this could have on Rightmove’s near and medium term growth”.
Berenberg repeated its price target of 420p for Rightmove’s shares, which yesterday closed at 528p.
Stand back, the beast is coming down!!!
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Rightmove’s towering arrogance/disdain towards its paying Subscribers is finally rewarded!
Not RIP Rightmove yet, however it is RTP Rightmove – Rightmove’s Tipping Point.
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You’re absolutely right – it’s sheer arrogance that will define their fall.
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Improve your service RM and lower your fees
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Every Mutt has its day…..
Anyone remember Nokia and Blockbuster?
#bitethehandthatfeedsyou
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Woolworths, BHS, Carillion, The Titanic, Blackberry, the list is endless. All too big to fail.
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The beginning of the end.
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This is good….very good.
Let’s all do our bit now and get rid of those silly banner and premium listing extras which mean nothing to your clients and you know that even “in the scheme of things” the extra £300 paid per month is a complete waste of money……the tide is beginning to turn people!
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The tide has turned. 3% in 6 months. How much by year end?
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This time last year, Berenberg put out the same message and cut cuts price target for Rightmove to 410p.
At the start of April THIS YEAR, they were promoting a BUY on Purplebricks shares at 470p and at the same time were also promoting Countrywide at 95p. These shares were about 125p and 7.5p respectively at the time.
These buffoons are probably the least respected big firm in the city, so don’t expect a big RM crash off the back of this.
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TheOutsider…
”don’t expect a big RM crash off the back of this”
No, we don’t.
It’s Rightmove continuing to shaft Estate Agents & Letting Agents that will cause it to smack into a wall!
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It hasn’t for the last 10 years. What is going to change now?
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Ok, I’ll briefly engage….
A few examples –
Consider the prices of “Concerts” that have escalated (think Ticketmaster?) to a point where people that used to go, don’t, because it’s too expensive ie. they don’t like being ripped off
Think car servicing – people that used to take their car to the dealer for servicing, don’t because it’s too expensive ie. they don’t like being ripped off
From my past “Police” profession – the partner that suffers “abuse” up to breaking point, then they finally leave (sadly I dealt with a number of those) …..a very sad example of a “breaking point” however everyone has a breaking point – and in this case, Rightmove, it is a “Commercial Breaking Point”.
Contrast “value/service/breaking point etc” with my motorcycle dealer scenario….. I make a 400 mile round trip to North England from Scotland because the service is excellent, the price fair, and they look after me/demonstrate positively that they want to keep me as a customer …..yet it costs me more to go there and stay overnight, but I’m happy to pay it.
Must dash now, as work to do.
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Jeez these are weak arguments.
Live music event attendances are up and rising (they cost more, but people still go).
You are seriously comparing an estate agents relationship with rightmove to a domestic abuse sufferer? That’s ridiculously incorrect, disgusting and comparisons like that dont prove a point and only do more harm to publicising how real and devastating domestic abuse situations are. There is no control with Rightmove. An agent is free to leave whenever they like. It’s a business, not a violent relationship.
Great. You have a trustworthy mechanic. Again, there is no point here.
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‘There is no control with Rightmove. An agent is free to leave whenever they like. ‘
Just in case there was any doubt that ‘The Outsider’ is indeed outside estate agency.
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You’re right The Outsider, there is no point, so just do the decent thing, bend over, look upwards and see if you can see the clouds through the opening.
I can’t give you the ability to interact/interpret intelligently, you’ll just need to try and find something that will help you on eBay ……..then bid for it!
When you can hold an intelligent interaction with me, come aboard, in the meantime, you’ll find the play zone with the soft coloured balls down the corridor on the left.
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Posted this yesterday but just in case it was missed…
Back in Jan 2014, 9% of Estate Agents were spending over £1k per month on Rightmove.
Move forward to June 2019 & 61% now spend more than £1k per month.
25% actually spend more than £1.5k per month!
Has the value of their ‘offer’ kept pace with their pricing?
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With so much profit generated from turnover this is just a little fly in the ointment to them.
Sadly until there is a sustained level of agents leaving it wil not effect RM, oKAY 4-5% of agents leave, with 10% rate increases per annum RM are still ahead of the curve.
OTM and Z are not the answer, they just want to replace RM and want to charge like them. I dont know what the answer is but i hope its coming soon!
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Agreed smile please
Investing more time/energy/effort (where the online aspect features) on our own company websites, directing people there, rather than taking them to the “usual suspects” 1st.
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The vast majority of agents have got fat and lazy off Rightmove.
There is now far less interactions and meaningful meetings and telephone conversations because of portals. And the portals are encouraging this buy reducing the number of leads.
The portals want to be the ‘King Makers’.
The more forward thinking agents are embrassing service from the early 2000’s and before. Proper call outs, inticing people to the office, reports with comparable evidence that has sold not listed.
Its a tougher market for sure but the oportunities are better than they have been for a long time.
We just need to kick the portals into touch.
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Having culled all the RM extras (and some printed media) we’ve diverted the money into our own digital/social media and a year in it’s already starting to compete with RM as a lead generator.
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Ditto.
Basic subscription, out of all press, cut out all the ‘Prop tech’ that has not shown a return. Invested more in staff and our own lead generation.
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I increased my local marketing heavily this year and have reaped the rewards.
Rightmove is no substitute for targeted local marketing.
The old fashioned ways of estate agency never went out of fashion, we were just guilty at times of being sucked into the virtual world.
Rightmove is going the way of the Newspapers, a less effective tool for estate agents, particularly as RM spends such a large proportion of it’s time NOT listening to/serving its Subscribers …….the vast majority of its time spent shouting/marketing how useful IT is …..when it actually ISN’T.
The latest Rightmove “Protectionism” changes only serve to underline that it is “Rightmove 1st! – Subscribers Last!”
Share price means NOTHING to RM Subscribers – as Subscribers actually want a fairly priced/effective service, however that ship sailed a long time ago ……and Rightmove left their paying Subscribers high & dry.
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WOW! Who saw this coming? 12% proce hike in January 2019, lose 3% of your customers, so send out 15% interim price hikes in July 2019.
As it’s been said, it is their sheer arrogance and “we’re Rightmove, we don’t negotiate” that will be their downfall. They are, in my humble opinion, not the NO.1 property portal they claim to be but, simply, a property referencing service.
The quality of the enquiries (not leads) is abominably poor and their wholesale attitude towards their customers is abhorrent.
as one client said to me on Monday, when Rightmove goes people won’t stop buying or renting properties, they will just use other platforms. The market is not dependant on Rightmove.
Take Berenberg’s and UBS advice and sell your shares because they will only continue to fall.
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They’ll carry on filling the cracks with decorators caulk until it’s too late. I was livid about the lack of Rightmove Plus yesterday just when I needed it the most. Even the general public are becoming aware of the fact that they are truly despised by their subscribers. I won’t use their referencing Company out of spite because I just can’t bear to line their coffers any more.
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It’s no surprise that there is fear of leaving Rightmove. In truth, its not actually the leads that will be missed, as these are getting far fewer and in many cases of poorer quality. Its the fear of what others in the profession will say, do and highlight to vendors. Now, there is an argument to say that we should all have confidence in our product and service, if you don’t, you should look at why! However, if we as a profession keep knocking those that leave because we see it as a competitive advantage, then none of us will ever get off the bus. Iv’e spoken to many of my fellow local agencies over the past few years and the one common gripe is Rightmove, however not one of us will walk away in fear of how it will get used against us. Hence the cycle continues. I’m sure one day we will all grow a big enough pair to just say No More! But until then…
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100% correct. We list with Rightmove and they do not provide value for money at all. I’m ashamed to say that, I only list with them, because my “corporate” competitors will use that fact to absolutely destroy me. Rightmove know this and capitalise on it. We sell 75-80% of our properties through actively utilising our data base and local knowledge. A large % of our “portal leads” are supplied by Zoopla, I don’t think we need more than one portal, let alone three.
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This may be why they are looking at becoming a conveyancing platform, in terms of additional income. The problem is that this cuts further into their subscribers’ income. Also, they are not well placed, in terms of the sales lifecyle, to sell conveyancing. They would be a good source of leads though. David Jabbari, CEO, Muve.
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RMEXIT is the 31st October 2019 everyone is handing notice in September and leaving RM
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If they continue to lose market share they will certainly increase prices or do what they do in Europe allow the general public to market direct on the portal prior to that happening they will launch a huge marketing campaign to encourage home owners to come on board.
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People just need to grow a bigger pair and adapt, we did so and business has been good.
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