Rightmove is to slash its charges to agents by 75% for four months.
Rightmove has also admitted that it got it badly wrong with its deferred payment scheme, and apologised.
Its statement says:“I don’t think many of us would have predicted sitting in our offices last week that we’d be where we are today, with the possibility of more restrictive measures approaching.
“Earlier this week we offered our independent estate and lettings agents a deferred payment scheme to help them through the next few months. The situation in the UK has changed rapidly and we’re sorry that it was too little and now inappropriate for the challenges we all face.
“Instead of offering the deferred payment scheme to independent estate and lettings agents, we’re going to reduce your Rightmove bill by 75% for four months, starting from 1st April whether you advertise residential properties, new homes or commercial premises.
“You don’t need to apply for this discount, your invoice will automatically come through reduced by 75%. To be clear, this is not a deferred payment, this is a discount that you don’t need to pay back.”
CEO Peter Brooks-Johnson said: “At Rightmove we are doing everything in our power to rise to the challenges of COVID-19.We have chosen to utilise our position to support our customers at this difficult time.”
Rightmove will also take a bit hit to its revenues and profits, announcing that the reduction it will cost £65m to £75m this year.
One analyst, William Packer, of Exane, said: “This move follows a wave of similar moves across the global online classified space (Cargurus, OTM, Auto Trader etc).
“We think helping customers through the crisis is ultimately the right long term decision to ensure the long term health of Rightmove’s network business.”
However, he warned that it brings risks, if the crisis continues, of “future periods of agency pressure”. However, he added: “That said, we think Rightmove maintaining the billing relationship (reduction rather than waiving of spend) is strategically sound.”
Rob Sargent, of The Acorn Group, instrumental in a campaign for a payment holiday from Rightmove, said this morning that he is considering his position.
He said: “Rightmove will still be making money while most of the industry are losing.”
Rightmove’s statement to the London stock exchange says:
SUPPORTING OUR CUSTOMERS – UPDATE ON IMPACT OF COVID-19
Rightmove plc, the UK’s largest property portal today provides a further update as a result of the evolving COVID-19 situation.
Supporting our customers
The speed of the slowdown in the UK housing market has been significant. Notably the number of property transactions failing to complete in recent days and likely changes in tenant behaviour following the announcement of the renters’ protections by the government may put further pressure on estate and lettings agents.
Although the likely duration of these market conditions is unclear, given this sudden challenge for customers Rightmove has chosen to offer more substantial assistance to support their businesses. This follows extensive dialogue we have had with many of them. We also firmly believe this rapid action is in the long term interests of our shareholders.
In recognition of the unprecedented environment we will today be contacting all our Agency, New Homes and Commercial customers to let them know that from April we will be discounting their invoices by 75% for the next four months, superseding our deferred payment offer.
The financial impact of these actions over the next four months will result in a reduction in revenue of £65m to £75m for the financial year ended 31 December 2020. The Board believes it is important to act quickly and we are able to implement this initiative given the strength of our balance sheet.
During this difficult time we will continue to innovate to make home moving easy for customers and home movers for our long term growth.