Online agents have just 2% market share, says Rightmove

The sheer scale of the challenge facing online agents has become apparent after Rightmove analysed market share of homes – both sales and rental, and including both available properties and those under offer –   on its site.

The analysis took in emerging models of estate and letting agency – including online and ‘hybrid’ agents – to establish that they have just 2% share of listings.

The analysis was of listings only – so any property that was listed by two agents will have counted twice.

The 2% market share has barely changed in two years, according to Rightmove, which chose the month of May for its analysis as being a generally very busy month for listings.

It is the first time that such a definitive figure has been put on the market, and shows that online agents have barely dented the market share of traditional agents.

The figure does not take into account private sale-by-owner companies that do not list on Rightmove, but whose market share is usually reckoned to be tiny – and may be smaller than has previously been thought.

The 2% figure does, however, underline the vertical nature of the uphill battle that lies ahead for the new wave of agency models – notably, Purplebricks, Estates Direct, Tepilo and easyProperty, all of which can list on Rightmove.

Rightmove terms such businesses as “non-local agents” that cover a large geographical area.

Rightmove commercial director Miles Shipside, going further than apparently ever before, seems to weigh in on the side of high street agents.

He told Eye that a local office still looks to be important to the public – even if they barely go there.

However, he emphasised that Rightmove does not “make a judgement” as to whether an agent is online or has a physical presence.

Rightmove’s analysis looked at property listing listings between May 2012 and May 2014.

In May 2012, listings on Rightmove from non-traditional agents were 1% of the market.

In May 2012, they were 2% of the market – and the proportion was unchanged a year later.

 

Group (% of stock) May 2012 May 2013 May 2014
Established estate agency models 99% 98% 98%
Emerging models 1% 2% 2%

 

Shipside said: “While recent research by The Property Ombudsman and Rightmove established that there are over 20,000 sales and lettings offices, this study indicates that the vast majority of offices cover their ‘local’ patch.

“Emerging models, typically those that are online-only or who have offices that cover a wider geographical area than usual, make up only 2% of property stock on Rightmove.

“We provide different types of membership based on geographical coverage and stock levels.

“Therefore someone covering a wide area with above average stock levels would pay for additional branch memberships to reflect the amount of stock they are advertising.

“In our vetting process for new joiners, we make sure that they perform all the relevant legal requirements of an agent, but we don’t make a judgement on whether they have a local high street presence, a secondary presence or an admin office.

“Our research shows that both sellers and landlords welcome an agent with a local presence, and while many may not actually visit the local office before instructing, the research reveals it to play an important role in assessing service and trust when choosing an agent.

“Consumers now have more choice than ever before with a record number of agents in the market, and ultimately they will decide what level of service they want or need.”

 

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21 Comments

  1. PortalPerson

    A bit of a misleading title. They might have 2% share on Rightmove sure but it implies 2% share across the country. Perhaps another PR stunt by RM to assure other agents that they do take them seriously ahead of the OTM launch?

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    1. Trevor Gillham

      They also charge 2 times the price for online agents.

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    2. PeeBee

      "They might have 2% share on Rightmove sure but it implies 2% share across the country." Not sure where you're coming from on this one, PP – care to expand a little?

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  2. sablade

    Parasite cheap poor quality online agents spend most of their time providing press releases!

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    1. Trevor Gillham

      But sablade, RM and Z both allow 'Parasites' (your words not mine) to list, even RM are doing a PR now about them.

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      1. PeeBee

        Hardly "a PR about them", Mr Gillham. More like a statement that despite all the blow they simply aren't making anything like an impression. It's a bit 'No $h!t, Shipside' in reality…

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        1. Jonnie

          Hi PeeBee, been a long time!

          Jonnie

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          1. PeeBee

            OH MY WORD!!! Thank goodness the cat finally dragged you in, mate!! Some reasonable craic is about to be had… ;o)

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          2. Jonnie

            Im looking forward to it, some of the old faces about and some new characters…..??

            Jonnie

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          3. Rosalind Renshaw

            Jonnie – welcome! Where have you been (or perhaps I shouldn't ask!). It is great to have you on board and really looking forward to your posts. So pleased you have found us. Now, all we need is the great Ray Evans.

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  3. Benay

    How very dare they? Please Miss, Miles is looking over my shoulder and copying my homework. At least Miles is paying the researchers and copywriters to pump out this as fact rather than anecdotal posts by anonymous no-ones on Property Industry Eye.
    One really would have to be intellectually challenged, gullible as heck or the victim of spivery to pump money into a venture so far out on the fringe of the property universe. This story confirms Easy Property have blown 5 million quid to orbit the market out about where Pluto is.

    For those concerned about Portalperson's point that Ros is misleading the audience the maths suggests that the actual figure is slightly lower than 2%; RM have 86% market, so 2% of their customer base is in reality about 1.67%.

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    1. PortalPerson

      RM "Solely" don't control 86% of the property advertisment market, they share a rough 60/40 split with the difference coming from agencies that choose to advertise on both.

      Roughly 86% of advertising is solely done online, taking your math would mean that Rightmove have a complete 100% dominance which they don't

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      1. Benay

        No-one said they do but RM do claim to have 86% of all agent branches on their site.

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        1. PortalPerson

          " RM have 86% market, so 2% of their customer base is in reality about 1.67%."… You implied or claimed it right there 🙂

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  4. Trevor Mealham

    Stop budget models like: Purplebricks, Estates Direct, Tepilo and easyProperty as mentioned above being allowed in and they'd have very little offering and fees could revert back sensible to 1.5% – 2%

    Many budget models have deep pocket backers which really is harming RM and Z's biggest subscribers. I think ' hand, dog, bite and feeds it come to mind''

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  5. Woodentop

    Haven't I been saying high street agents has nothing to worry about on-line only agents who have been around for many years and this article continues to prove that after all this time they don't get it …….they cannot compete with the service a High Street agent provides. All they can offer is cheap fees for little to no service …. all dot.com hype all over again and we all know what happened next with Easy Jet Ryan Air ilk …….. all the other carriers are still in business with the lion share. easyProperty will just be a glitch until the honeymoon is over.

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    1. PortalPerson

      Woodentop: Whilst I am not comparing selling books to selling property I am sure that book shops thought this many years ago. Sure you cannot replace the smell or feel of a good book shop but not everyone needs or has the need to walk into one and buy a book when they can do it cheaper online. I've seen someone else on linkedin debating a similar point to this and he was quite rightly saying that some people don't care about the service and would rather just get their house sold for a cheaper fee. As good as "agents" services or offerings might be; they still don't outshine the cheaper price that Budget agents scream from the rooftops – it is simply human nature to look or lean toward the cheaper price. Now are they getting a better bang for their buck ? sometimes yes, sometimes no but the real point of the matter is that it's the consumer who decides, not the agent, not the portals and not (to a certain extent) the vendors. Consumer traffic (be it foot or web) will go where they feel they're getting the best index of property in their search, now that might be RM or Z for some people but for the most part they will check out more than one portal and more than one website and more than one page of search engine results so ultimately the property has a very good chance of being found on the agent' own website whether it's listed on a portal or not. This is the same for _most_ agents and most is due to the generally poor states of websites in the industry [a topic for another day]. The point I'm trying to make is that ultimately it's not down to the portals to decide whether the budget/cheaper/online only model will work, it's down to the consumer and vendor, their traffic and the risk the vendor is willing to take to save a few quid or make a few quid if he's promised a higher price by a traditional agent.

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      1. Benay

        Online Agency has been around since the last millennium and has grabbed a whopping 2% market share. With effectively no change in the Tech in 15 years what do you think HAS all of a sudden changed that means online agents will suddenly be both profitable and popular?
        The SEO and robust tech systems that you are on about mean that an on line Agent can not offer, as you have previously claimed, "infinite" cost savings; the savings are replaced by at least an equal spend on buying a presence and awareness. With only two in every hundred For Sale or Sold boards that is massively worse impression on the public than even the poorest performing local agent.
        I appreciate on-liners grab cash for everything they do irrespective of success. That means in theory they can offer fees 50% of standard fees but in reality the odds of selling through an online Agent are at best 49:1! The only time the great British public usually have a punt at those odds is on the Grand National. The reason why on line has not and will not establish itself, they can not afford to stay in business long enough to become recognised.

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      2. Robin

        "not everyone needs or has the need to walk into one and buy a book when they can do it cheaper online"…. Well, actually you are comparing books with selling property, and you know very well that the two businesses are entirely different. How successful would Amazon have been if their customers could not be sure whether a book was going to be delivered or not? If they only delivered the goods ordered even 80% of the time, and customers had to pay whether or not they got what they ordered, the business would have folded within months. "some people don't care about the service and would rather just get their house sold for a cheaper fee"….. Thats the problem with online agency – all they can sell are the tools of marketing – they cannot guarantee a result, and even though no-sale, no-fee agents also cannot guarantee a result, they don't get paid until a sale completes. That is the strength of the traditional estate agency model and is what makes it different from any other on-line, cut price business. Traditional estate agents are paid on results, not empty promises.

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      3. Woodentop

        You can't compare book shops as they are not a service industry. That is the point in question. Budget does not provide the service, it does provide a limited service for a limited fee but anyone who has been a High Street agent will know that it is the service that the consumer expects and those that want a cheap fix, often find they wished they had stayed with the High Street … as one on Monday told me ….. they paid £650 upfront and not a single viewing and they only went on-line as they were told/under impression that estate agency is all about advertising and nothing else. WRONG. and boy do they not have a kind word now for on-line agents. Yep the property is now on the market with us, and being proactive they already have viewings booked this week. Yep I'm charging more than £650 but then I'm working hard for the vendor!

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      4. Shaun77

        It's only cheaper if they provide the same outcome, e.g. the selling price achieved. The amount you achieve for a property often comes down to how quickly it goes under offer. The online model is totally "reactive". In other words, they wait for the phone to ring. In most cases, they don't have an existing database of buyers to target the property to. Given they've been paid up front for simply advertising the property, who can blame them for not being proactive?
        A proactive, focussed, No Sale/No Fee approach will result in a quicker sale and, as such, a higher percentage of the asking price achieved. A hands off, reactive approach can result in a slower sale resulting in less of the asking price achieved. So, you may save a few grand on the fee but could well end up with £5k less for the property. It's a big gamble.
        In addition, this doesn't take into consideration the £'s successfully saved through strong negotiation both at the outset and when buyers want to revise their offer down at a later date for numerous reasons.
        The book comparison is completely irrelevant.

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