When the word ‘Rightmove’ is mentioned to agents, it immediately conjures an image of an Oligarch waving a Kalashnikov in the air shouting orders at the proletariat beneath them, such is the ill-feeling between the portal giant and its customers.
The reasons for this friction, this angst, are well documented – a mixed bag of outrageous annual price increases whereby as subscriptions have risen so too has the apathy and disdain that Rightmove seemingly has for its 19,000 customers. Ironic really, when you consider that all Rightmove does is to, in effect, sell agents’ their own stock back. In any other sector this would be ridiculous. Like taking your car for an MOT and having to buy the car again. Or writing a book and paying the publisher to print it – moreover, allowing them to keep all of the profit too.
Talking of profit. Rightmove made £219.7m last year. To put this into perspective they grew their coffers by £408,364 for every single one of their employees. That’s right, on average each of their staff members made them over £400,000 in 2019. And perhaps that’s why the typical employee earns a whopping £63,468 a year, all except for one of course and that’s the CEO, Peter Brooks-Johnson. He earned £2.1m last year. That’s £175,000 a month. And if you think that’s spicey, think about the fact that the CEO’s total remuneration is now 488% higher than it was ten years ago. In 2009 the top job earned a ratio of EIGHT times the average Rightmove staff members’ salary.
Now? Now that’s leapt to THIRTY FOUR TIMES that of the ordinary worker there. Communism this is not.
Rightmove is a massive success story but all depending upon which side of the table you are sat at. If you’re at the head of the table as a shareholder or member of the senior management you’re smashing it. But for the little guy, the agent, not so much.
An example of the relative inequality between Rightmove shareholders and their customers is the following:
Since 2009 the cost of listing homes on the portal has increased from £308 per month to £1088 per month – a 253% hike.
In the same period shareholders’ dividends, the cash that they take off of the table has grown from £10m a year to a whopping £60m last year. A 452% increase.
Of the £1,088 average fee that Rightmove now trousers each month from agents, £924 is pure profit. As agents have struggled, Rightmove have squeezed and have prospered.
And what of value? By this I mean that cost and value are two different things in that something can cost more and more but will still provide a return that’s relative to that cost increase. As costs go up, so does revenue for the customer. However, can the majority of agents attest that their revenues have increased at the same rate as Rightmove’s fee increases? Has lead quality improved? Or have Rightmove simply found more and more ways to attract volume rather than quality? No wonder some 25% of email leads that are sent to agents are not even opened – because agents feel that many of these enquiries hail from drunken tyre-kickers in the depths of the night.
As you read this you will surely wonder how it is that these Milton Keynes oligarchs have managed to take the shirt from your back, spray it with Fabreze and to sell it back to you for more than you originally paid for it?
One thinks that instead of investing in expanding your estate agency you’re better off simply buying shares in Rightmove. But if everyone did that there’d be no agents and therefore no Rightmove.
Hey, wait a sec… hold my pint.
All true but what’s the solution whilst the big boys get huge discounts and won’t sacrifice these to list on the challengers?
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I sold a property last Jan and paid £7,787 to the agent who in all honesty didn’t have to do that much so please don’t moan about how hard you have it when most agents I know drive round in brand new M3, Merc’s and Audi’s.
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I take your point but in my own calculations the excessive Rightmove price per office we pay (approx £1k+ over Zoopla/On The Market per month/per office ) means we pass on a cost of £100 per property sold directly to the seller…..i.e. you.
To me the perceived selling points of Rightmove is that (mostly) all properties are in one place / its free and familiar…
The public generally do not realise that its not free and they are paying for it indirectly.
Without the RM fees we could reduce our fees to sellers or alternatively employ approx 4 more staff
Is there going to be a part 2 of the article tomorrow where Russell suggest what can be done?
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Mark J I find this site so interesting as it has lots of insight and news about things I need to keep up to speed with relating to property.
I always find the rightmove articles good because everyone gets so animated about them and from the other side of the fence it’s just a website I’ve always used. This is the first time I’ve seen someone put a price on having my property on the website so if you’re figure of £100 is correct a) Is that per week/month or for all the time it’s live? b) If thats a one off cost I’m amazed it’s that low c) If an agent asked we to pay the extra £100 to be on there I’d say yes everytime!
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Seller0169
The £100 is not an absolute figure….that would be higher. This is my “back of a fag packet” maths that says an agent may well pay Rightmove £1000 extra each month over what they would pay Zoopla/OTM per office / per month. Assuming avg sales of 10 properties per month = £100…
So £100 is what its costing the agent (and consequently you the seller) EXTRA to pay for RM’s inflated and upwardly mobile pricing structure.
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Only a fool would pay all that money to someone for doing ‘not that much’. Why didn’t you sell the house privately as it’s so easy??!!
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I’m not saying it’s easy but I have friends in the industry who used to moan about what they spent in the papers and now it’s what they spend on the internet, the worlds moved on and if everyone’s online then that’s where you need to advertise. Taking photos, taking measurements, typing up the text and then waiting for the phone to ring it most most customers would protest about as it’s a large fee.
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What people like you don’t understand is that half of our time as an industry is spent ‘Sales progressing’, this is the unseen side of our fee structure, the hours spent chasing up solicitors, surveyors, mortgage valuations, going up and down the chain in order to make sales happen, that’s what you don’t see……..
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Rightmove are by far the highest fee charging portal it is their intentions to increase all fees to the minimum of £2500 per month per branch/office. The current rates are all over and depends on your company corporates get a better deal than independents, the minimum is around £1500 per month + VAT that’s the basic package there are all sorts of add on’s. I don’t know why agents put up with their attitude and pricing, it must be in their own heads.
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How many hours do you do that per transaction
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I am a developer I often do sell privately – it is really not difficult
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Seller0169
….you have overlooked the that your fee also represents the investment your chosen agent has inputted prior to you engaging their services.
You would have no doubt made an informed decision as to who will market your home, after inviting other agents for their opinions. You will also have no doubt have gained valuations from agents whom you believe their respective brands would probably best represent you and your property. It is rare that any agent charges you a penny unless they sell your property (that is not to include the onliners, but thats another conversation for another day). You sir/madam fall into the “anyone can do it category”.
It is the likes of RM that have dumbed down estate agency and the perception of the job from the public’s view. Bang it on RM and it will sell all by itself.
Incidentally, the cars you obviously begrudge people driving, are probably leased, and give a damn site more confidence to the customer as opposed to rocking up in a G plate Micra.
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just crunching the numbers you might well have paid nearly £8000 to an agent but what you haven’t mentioned is you are nearly £30,000 better off because you did.
You can’t come on here fighting Rightmoves corner with one sided arguments like that it; it doesn’t wash.
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where is the evidence that he would have got 30K less of he did not use an agent?
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Show me the property that was sold and I will run through why FSBO sales achieve between 5 and 10% less than duty of care and skill agent sales.
I am surprised that any property developer is unaware of the healthy symbiotic relationship that ought to be present with the agents in the area.
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Supporting OTM is the answer.
I never even talk about RM now… “on the market and the other portals…”
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Rightmove are experts at selling “vanity” on the back of reminding eneryone on a regular basis to … “look at our massive visitor numbers” However the result for their 19,000 agents customers is less than cira 0.05% of these visitors are serious buyers and actually transact. So long as agents keep paying up Rightmove has no need to change……But one way or another, like the weather, change is in the wind. !
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Rightmove do well out of stupid agents paying them exorbitant fees.
Wean yourself off them, have a longer gap before you upload to them, ask your CRM to automate this for you, they all can.
Properties can be sold without them, take control back to your own website.
Rightmove will be charging £5k pm per branch in a few years time, if agents continue.
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After all is said and done, more is said…
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It’s nice to see a shorter opinion piece with a lot less verbosity about it but this doesn’t say very much at all and doesn’t explore how Rightmove have achieved what they have.
If you dig into the maths of the profits in simple terms it is easy to begin to explain the basics of why agents have to be on Rightmove. If there were just two agents, the average revenue per agent is £1100, one agent knows they’re paying £1600 a month, they can work out the other agent is paying £600 for the same service.
2 agents paying £1500 a month can work out a 3rd agent is paying £300
When 80% of the industry paying more than ARPA and 20% paying less, it’s obvious the 20% are enjoying economies of scale discounts that give them a massive trading advantage over their competition. The 20% paying less have no reason to stop using the duopoly portals that provide them that commercial advantage over agents who can’t negotiate the same rate- the 20% also have no incentive to support any project that threatens that advantage.
I worked out this time last year that independent traditional agency is generating about 96% of Rightmove’s profits and are effectively funding their corporate competition’s profits too.
When the say no to Rightmove campaign last year failed to gather the support it should have I looked at why, I built a system to figure out why agent who cannot justify the subscriptions they pay, pay: The cost of engagement for Rightmove is a lot less than the cost of engagement with other portals and their own websites.
Rightmove are feeling pretty confident again, from what I’ve heard the best take it or leave it deal is another 33.1% increase in the next 3 years which takes a typical £1500 agent up to £2000 a month.
Anyone who went through 88-94 knows that after the spring 88 boom came a 5 year bust. I don’t think I would want to be committed to a 3 year tie in, committed to another £500 a month when sales are easy but completions are difficult because of a lack of end of chain stock.
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Is there a way of increasing the level of this debate? As a lawyer who reads the property press it is pretty depressing to see this continual sharing of concerns about Rightmove but without any serious proposals to address it: it is like some addiction to self-harm in the estate agent community. There is a big issue here. This is that consumers want to go to ONE place to see what’s on the market. They do not want to have to go to multiple portals for partial views. Now Rightmove won that battle years ago: they did not just win it, they nuked it, and there is not a single serious competitor to Rightmove in the market. All the data suggests that their market dominance is growing every year. So where does that leave us? Well, there is a very serious competition and public policy issue here where one portal can use its monopolistic-style power to extract whatever fees it wishes from agents. Furthermore, if I am right that there is really only ever room for ONE dominant portal in property sales information, the situation is worse because it means that in this area there is a risk of market failure. The traditional solution where there cannot be (or we do not want there to be) an effective market in a service is for it either to be broken up (witness what US competition authorities are doing with Facebook etc) or to be made free to the consumer (e.g. health, education and police). Some may say it sounds crazy for a government body, e.g. the Land Registry, to host the free listing of property particulars by agents but if I l am right, and there cannot be an effective market in these portals (because consumers need there to be only ONE comprehensive portal) then breaking up Rightmove is not really an option. The alternative is for people to just accept that Rightmove won this battle, as AutoTrader did with cars, and to move on. Given that governments are unlikely to see property listings data as sufficiently ‘official’ to justify public provision, Rightmove’s continued dominance looks the most likely future.
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Sorry to have an opinion that differs from yours but Rightmove is an ageing Goliath that’s only liked by lazy negotiators, passive intermediaries, portal reliant agents and 99.97% of consumers who use the portals as an entertainment channel.
Serious applicants for both sales and lettings don’t love the portals; their decrepit town or postcode search or woooo hoooo – draw a little map search is so out of touch with buyers and serious tenants. There is nothing to love and as for all the properties in one place – they aren’t. The only way people who will exchange and complete on a transaction can get to the front of the BIG queue is making contact with the agents who sell the sort of thing they’re looking for. Waiting for a portal notification rather than a phone call from a listing agent is like joining the queue for the taxis at Kings Cross station rather than walking 20 yards and hailing one on Euston Road.
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We tried to increase the level of the debate with the Say No Campaign but sadly it failed as not enough would come on board
We were close… just not clse enough
Persoanlly we stood our ground and are no longer listing with RM unless they offer better rates as mentioned below
Robert is right and buyers have little option but to use portals as agents became lazy
Know your market, know your applicants, treat your clienst well, you dont need portals
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Someone asked what’s the next part of this article, i.e. what, as agents, do we do ?
What we’ve just done with our 4 branches is reduce the whole package to a bare minimum, saving around £1300 per month before this latest round of increases.
If we can’t all agree and leave rightmove, which is obviously way more complicated and difficult than it sounds, then everyone reducing to the lowest level possible sends them a very clear message about their price point. Until they reach that and everyone keeps paying, the increases will keep coming.
I don’t actually agree they are selling our shirt back to us any more than newspaper groups did a few decades ago . They’ve built a consumer driven product that does exactly what it says on the tin for prospective purchasers. In the postcodes we operate in if you run a for sale search in Rightmove, Zoopla, and on the market that is the order of number of properties you will find. So clearly as a purchaser you see more of the market with a rightmove search so it stays as the must have portal. I did think Zoopla would eat in to that more as those in their twenties who had used the younger more trendy ? portal moved in to their 30s but it hasn’t quite happened.
Anyway, like most agents we are too worried that it will detrimentally affect our business to leave RM but at least we don’t have to buy the baubles round the ads and save ourselves a bit of money that could be used to market through another medium. Its not quite a revolution but it could be a strong message and really affect them where it hurts if we all did it.
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‘They’ve built a consumer driven product’
I think you’ll find us agents did that.
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If we had we wouldn’t be in this situation
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Isnt this where the SayNo campaign came in a year ago
This is exactly the point
And why we aer STILL not listing with them saving some projected £1860pcm inc VAT
We have been negotiating with factual info that 2-3 other agents have received, or have been offered discounts
2 have return at £1500 INC VAT
1 refused at £1410 inc VAT
All avery very local to me
My concession by my inept rep “you can return at you 2020 rate of £1668 inc VAT !!!
Does this make any sense to anyone
(BTW I never paid the 2020 rate…. thats when they started the discounting …!!)
Nuff said
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RM still lost 3% of EA branches – down to 15922.
Two years ago they had 17328 EA branches !
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“the typical employee earns a whopping £63,468 a year” I will have what ever you have been smoking. Feel like posting where you pulled that number from?
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According to RM published accounts – total payroll costs £35million for 558 employees (inc. Directors). The average of £60k will include employers pension and NI contributions. Given RM have an office in London and a number of field-based staff (plus 100 company cars), it stacks up.
Although RQ is incorrect in saying that is what a typical employee earns – the figure will be closer to £50k if you exclude c.20% employer contributions for NI/pensions.
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Rightmove will continue to be monopolistic as long as all the stronger agents in any area support it. Take their properties away, (which will sell anyway in a buoyant market) and the public will soon learn that they have to look elsewhere for them or miss out. Once that ‘back has been broken’ a much more even playing field will be laid out. There is a lot to be said for those agents (plus any others that would like to come with them) to set up their own joint portal for their own catchment. That is after all where people are looking, it is irrelevant what is happening in other parts of the country. This is being done already and can easily be replicated
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