An analyst has told investors that Rightmove’s deferral plan debacle was a disaster that could tip its relationship with agents into demise.
Jefferies said that the deferral plan was “so universally pilloried by agents” that it forced the portal into an embarrassing U-turn.
The bank added: “Rightmove management may think that its four-month fee discount has now put its relationship back on a sustainable footing
“We see the opposite: we see its actions as directly leading to an opening of the floodgates.”
In its note to investors dated Wednesday this week, Jefferies has said that there is evidence of collective action by agents against Righmove because of the anger engendered.
The report goes on: “We’d highlight the Say No To Rightmove campaign as evidence, and having spoken to the campaign’s lead architect, we remain confident of our view that we just may be on the path to returning the UK to its agency-backed roots, Rightmove’s reckoning being one of the milestones along that journey.”
Jefferies goes on to say that the coronavirus-rated “bungle” will result in lasting damage.
In a reference to agent Rob Sargent, who set up the Say No To Rightmove platform, Jefferies said that “a campaign of sustained agitation is afoot”.
The note to investors says that the only way out for Rightmove “is a permanent fee cut”.
Jefferies says: “Rightmove is now in a very difficult predicament: it faces huge involuntary churn as a result of the impending housing downturn; it sits on a price point that is a multiple of its peers; that price point could actually exacerbate the involuntary churn . . and industry goodwill towards Rightmove has reached an all-time low, driving an all-time high risk of collective action.”
Jefferies, which has in the past advised Zoopla, has “comfortably” reiterated its ‘under-perform’ rating of Rightmove, and lowered its revenue and profit forecasts by 25% to 30%.