Why estate agents feel so short-changed by property portals – by The Times

No less a paper than The Times has waded into the long-standing controversy over portals’ “substantial” charges to agents.

The paper’s financial editor, Patrick Hosking, devotes 1,000 words to the subject, describing Rightmove’s pricing power as “Herculean”.

He says that agents feel they have no choice but to use the portals “to advertise their wares”: “Local newspapers used to be the subject of their irritation; now it’s the likes of Rightmove and Zoopla.”

Hosking goes on: “Rightmove charges the typical agency branch £1,077 a month for its homes to be listed on the platform.

“That’s a significant outgoing for a branch, especially when every housing market indicator is moving in the wrong direction — new buyer inquiries, agreed sales and new instructions are all down.”

What rankles with agents, he says, is that they do all the work, while the portals get a disproportionately large chunk of income simply for letting buyers “scroll through homes”.

Hosking also points to the huge wealth gap between portals and agents.

Rightmove “is a cash-generating gorilla” worth £5.3bn; Zoopla sold last year for £2.2bn.

By contrast, Countrywide is worth £80m, Foxtons £179m and even “branchless agency” Purplebricks is worth “only” £330m.

Hoskins maintains that it’s the “estate agents’ own fault that they are not wallowing in all this fabulous gravy themselves”.

Rightmove was started up by corporate agents, who sold their holdings when the company floated.

They made a fortune then. But had they held on, they would have made a further capital gain of 18 times their money plus £1bn of dividends.

Agents, he says, realised their mistake and began OnTheMarket “to win back what they saw as rightfully theirs”.

However, Hosking says that while OTM claims success on several fronts, “it all sounds promising, except for one thing: the stock market doesn’t believe the story”.

OTM made a loss of £7m in the last half year, and was down to its last £8.8m at the end of that period, says Hosking.

He says that OTM boss Ian Springett is upbeat, with the Times article suggesting that if either Rightmove or Zoopla started to feel threatened they would either turn up the advertising taps “or respond with price cuts”.

The full Times article is at the link below but likely to be behind a pay wall.

Yesterday, Rightmove shares touched a record high of 614p before closing at 607p – 1.8% up on the day.

OTM shares closed at a record low of 68p.

https://www.thetimes.co.uk/article/selling-their-great-idea-was-never-going-to-be-the-right-move-for-estate-agents-p6cph9n8h

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39 Comments

  1. GPL

     
    “He says that OTM boss Ian Springett is upbeat, suggesting that if either Rightmove or Zoopla started to feel threatened they would either turn up the advertising taps “or respond with price cuts”.
     
    Just repeating it over and over Ian won’t make it happen. FFS, get your finger out and change the record …and your strategy!    
     
    “What rankles with agents, he says, is that they do all the work, while the portals get a disproportionately large chunk of income simply for letting buyers “scroll through homes”.
     
    …..”scroll through homes”  ….pretty much sums Rightmove up. They could switch “Find Your Happy” for “Scroll through Homes”
     
     
     

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    1. JonnyBanana43

      Good point, well made.

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  2. Ric

    oh no… medication, where are my tablets… Can someone please come and check on me… the shakes are coming back.

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  3. Bless You

    Ian spriggot is the Jeremy corbyn of estate agency.

    Absolutely no chance of winning but keeps talking shiite and collects his pay check.

     

     

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    1. JonnyBanana43

      Brilliant 

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  4. Ric

    RM do have a fabulous team to be fair, having dealt with many of them over the years and knowing a few personally.

    The industries VERY BEST people ensuring house hunters can see all these homes for sale & sold. A team of dedicated people, who work hard in their own sales & marketing departments to keep the wheels turning and dealing with all the unhappy customers who are yet to sell.

    They turn up, every day, never moan to the RM Bosses, they are to be fair pretty impressive people who stack the shelves, prepare the labels on the products, keep it as legal as possible and deal with any complaints from end users.

    Gosh they even despite working for RM, give their own phone numbers and emails addressees to the public, to take the strain off the company!

    PS – That’s us lot. (The unpaid work force!) Imagine Any supermarket without the Shelf Fillers and Stock Delivery Teams!

     

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  5. JonnyBanana43

    Ian S is the fall guy here. Having had lots of experience with setting up PrimeLocation in the early 2000’s he really should have done a better job. Many people blame Zeus Capital, regardless, whatever started as a mutual should NOT have been floated on the markets. Many agents feel betrayed, although we would all have felt happier if our gold shares had rocketed on the stock market. They haven’t.

    My biggest gripe is with agents themselves. I actually have some very positive experiences with OTM. I’m a “upper end” agent covering North and East Yorkshire. It’s worked well for me. The torrents of abuse I’ve received on EYE is unbelievable. So much so I’ve stopped posting about OTM.

    This is my point; OTM will only grow with your support. Agents are quick to slag it off. Whilst they’re paying RM a crazy amount of money, Zoopla is less money but produces next to no enquiries. Give OTM a chance.

    On the Zoopla point…a lot of local agents have rejoined Zoopla.. “It doesn’t produce me any decent leads, but I daren’t risk loosing an instruction by not being on all three portals…”  Get a grip!

    Why support Z but not OTM?

    answers on a postcard!

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    1. Property Pundit

      OTM = Norwegian Blue (Month Python reference for younger readers).

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    2. GPL

       

      Join (no need to re-join for me as I never supported 3 Portals) Zoopla?

       

      Join Zoopla, for me, only if it will be a National replacement for Rightmove.

       

      I gave OTM financial support/backing/subscriptions and it has failed to deliver. How many years do I keep feeding the Dead OTM Duck when it won’t change it strategy.

      The facts are crystal clear – We now have 2/3 Portals, which we are supposed to feel are essential to be on? I and many others agree to differ.

       

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  6. AgencyInsider

    ”What rankles with agents, he says, is that they do all the work, while the portals get a disproportionately large chunk of income…’

    Oh the irony! This is precisely what has been at the root of agent/solictor ‘conflict’ for decades. The lawyers have alwayes loathed paying the agent out of the proceeds of sale because it highlights the relatively meagre income derived from conveyancing.

     

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  7. J1

    Here we go again

    OTM offered me a free period yesterday and the £150 per month after that !

    Make of that what you will.

    Why not all of you take all your houses off all portals at the end of the year?

    Stop believing in them and start believing in your brand.  Become the place where people want to do business – promote yourself instead of promoting portals…….

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    1. Jrsteeve

      Then why not give it your support? It needs a critical mass of agents to tip the power away from Rightmove. OTM is/are not perfect, I’m no fan boy but would far rather support them than Rightmove.

      The sooner other agents finally get on the bandwagon the better. Zoopla are no angels so please don’t support them over OTM.

       

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  8. Trevor Gillham

    If you have a business that solely depends on another business then you’re in for trouble.

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    1. Property Pundit

      Nail. On. Head.

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  9. GPL

    So, few on here will be surprised I tendered my “Notice to Leave” OTM several weeks ago, just to make sure they know that I’m exiting OTM V2 in January 2020.

    Amazingly, they seemingly want me to stay? Is there anything they could offer to make me stay?……

     

    Can you imagine…. my reply? Even more surprisingly I replied with “Positive “ ideas/opinions/advice, part of which was to DUMP the sh@te TV Ad and relaunch with something with a bit more class, something memorable for the right reasons …..that along with a few other ideas/feedback. I said if they changed their strategy then I might consider returning to OTM.

     

    Thing is, they have rarely listened to their End Users and their Tombstone may well read “Here lies Oaaaaaaawn the Market – Dead, Buried, Forgotten ….if only they had listened”.

     

    Unsurprisingly, Zoopla looms out of the portal mist, whilst Rightmove Annual Christmas Past Bells can be faintly heard tolling in the portal atmosphere.

     

    I make this hopeful prediction – We all need just one UK Digital Advertising Portal.

     

    – It’s not Rightmove! …..we simply cannot keep paying their Monopolistic Prices, and they have NO intention of changing the way they treat Agents.

    – OnTheMarket has failed, and continues to fail to set the Portal World alight with a “Product/Brand” that we truly want to lead with. They are the failed 3rd Portal. OTM will be appearing on Big Brother, Strictly, I’m a Celebrity….. trying to revive it’s fortunes.

    – Zoopla? ……The Great Pretender! Always happy to play 2nd best. When will Charlie decide that his Portal Factory really can be No 1.

    What do we all want for Christmas? 1 UK Online Advertising Portal – Transparent Pricing for Digital UK Property Advertising. WE DON’T NEED 3 PORTALS!

    In the meantime, we are all hopefully driving our Local Marketing to keep our own Brands relevant and deliver results locally. There are huge opportunities at a local level for all of us.

     

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  10. Property Pundit

    (In the voice of Marcus Bentley) Day 4102 and the house agents are still squabbling about Rightmove prices.

    As a non-agent, this whole matter to me is tragic, comedic, frustrating, essentially a pathetic never-ending soap opera that blights the industry. ‘I’m definitely looking at leaving’, ‘Dare you leave’, ‘I’ll leave if you leave (but just in case you sneakily decide to stay and welch on our agreement, I won’t leave either)’, etc, etc. It’s getting boring now people, just get your exit plan together and do it.

    In any rational business when your costs go up, you almost always have to pass these rises on to the customer. Oh not estate agency! How about we undercut each other on fees? Brilliant, that’ll secure the listing! Completely ignoring the fact that over half of listings go on to sell with another agent.

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    1. WiltsAgent

      Plenty of us have already left. If Rightmove want to see where this will end they should take a look at the motor industry. All of a sudden Autotrader is losing dealers to new competitors and the truth is that Rightmove are no different to Autotrader, full of folk scrolling through houses or cars they are never going to buy.

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  11. Property Poke In The Eye

    Rightmove is slowly being taken down slowly.   More agents are leaving RM.

    I would say only about 60% of agents are on RM where this figure was about 80% a few years ago.

    That’s why agents are paying more each year – this will continue.

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  12. SLF

    What is it with with you lot!!?

    Reading the posts on here is amusing, frustrating and very confusing. JUST COME OFF RM & GO WITH OTM. It’s so simple.

    You are all handing £1,000s a month to a company who don’t give two s**ts about you. Then you moan and complain about it but do absolutely nothing. It beggars belief. YOU DO NOT NEED RM……THEY NEED YOU. Walk away from this parasitic company and save yourself some money, credibility and self respect. Either that or accept you don’t have the common sense or bottle to leave and stop moaning about it.

    Have a good day x

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  13. J1

    OTM is not the answer

    It has almost run out of money

    Its a bit like a regional agent who has lost market share, run out of cash and now has nothing to spend on marketing

    Doomed

     

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    1. Bless You

      they are strong in market share terms. We all want them to succeed. It seems someone somewhere isnt interested anymore in managing the agents on the site.     

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  14. JJim

    For as long as I have been a voyeur on this site (for some years up until now) the same dilemma has been raised by agents in terms of ditching Rightmove. Whilst we would love to save over a grand a month, for most it would be commercial suicide as sales listings  are hard enough to convert as it is – certainly my competition would slaughter me if I were to stop advertising on Rightmove.

    The last time Rightmove tried a price hike with me I scaled back my products to a basic package and have noticed no difference to my market share. In fact my office improved from Rightmove’s own Best Agent Guide from ‘Highly Rated’ to ‘Exceptional’ since dropping the products!

    I am sure it won’t be long before I am told of the new proposed price increase and this time I will be dropping lettings as I get better interest as it is from Zoopla and OTM.

    A pivotal moment for me was when, some time ago, I was given a free trial of Rightmove’s Featured Property for two months with the promise it would increase my rankings in the property views. As it was free I had nothing to lose. Following the trial, the Rightmove rep tried to arrange a telephone meeting with me to discuss. I delayed that meeting for as long as possible. When he eventually did speak to me, we looked at the ‘core area stats’ and we were both pleased to see me at Number 1 out of 70 agents! However he soon became disappointed when we both realised that the Featured Property trial had expired four weeks before – the ranking was purely  ‘organic’  as a result of advertising good quality and sensibly priced stock.

    As has been said countless times before, the property portals would be nothing without our stock. Rightmove’s instant live listing gives them the advantage over other websites and we are helping them maintain their commercial advantage by letting them.

    My New Year’s resolution is to stagger the timings of my new instructions to the various portals. For sole agency instructions I will be uploading to my own site for the first day, Onthemarket and Zoopla the next day and Rightmove the day after. Not only will this hopefully encourage more traffic to my own site and increase my google ranking but it will decrease the interest that Rightmove gets. As well as the benefit of having a control of the internet traffic it should stagger the amount of enquiries and improve our time management.

    You never know it might be the start to weaning off Rightmove…

     

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    1. Woodentop

      Whilst we would love to save over a grand a month, for most it would be commercial suicide as sales listings  are hard enough to convert as it is – certainly my competition would slaughter me if I were to stop advertising on Rightmove.
       
      That has always been a dilema for agents and was in early days a justified concern. But that was back then? The industry has moved on and the public are more than aware of all portals and our evidence is that people google search more for a property and get all portal results, than go straight to a particular portal (some still do) as they know the property they may want is probaly on the other protal.
       
      Agents made RM and not the other way around. Agents can do it again with any other portal.
       
      Tell your customers real reason why you are switching, I haven’t ever come across one say no, when they were told the expense and it would be passed onto them. The reaction, “your going to who?” is often now, “I’ve heard of them” and then its down to you selling it …. put the effort in.

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    2. padymagic

      Dear JJim You make some interesting points can I just add Consider setting up a facebook account and add your listings on their too. You can also twit or tweet (although I am not convinced this works at all). Secondly I have watched the rightmove gorilla grow since its inception, it was a blinkingly good idea then and still is, RM needs competition to demonstrate to it’s shareholders just how valuable it is and as many contributors have mentioned above we are kinda stuck with them lest we drop it to then find our competitors didn’t and they take some of our market share. I think OTM & Zoopla are credible alternatives but they aren’t strong enough to actually square up to RM toe to toe. Yes we the paying customers are the shelf fillers and the sales team, yes before RM and the rest we were beholden to the newspapers and didn’t we used to complain about them too? I know I did. Either poor quality ink/paper, poor position or editorial content etc. So like the newspapers have been felled by RM, whats next around the corner tech wise could do the same to RM. The future for RM is guaranteed for as long as they hold the upper “tech” hand.  If the original corporate agents came up with RM perhaps they could pull a second rabbit out of the “tech” hat?  

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  15. Woodentop

    However, Hosking says that while OTM claims success on several fronts, “it all sounds promising, except for one thing: the stock market doesn’t believe the story”.

     

    So what? It should be pulled off the stock market and back to where it should have stayed until Springett stole the business and changed its way forward. HE has to go and it time the shareholders booted him out, for he is in the main the reason why people don’t like OTM and complain on here.

     

    There is nothing wrong with the principle of OTM and work for agents. Many of those that say “No”, never seem to have come up with a perfectly acceptable argument against customers not being able to source  a property or that its fees are competitive and a big saving compared to RM. Moan about Springett as much as you like but not supporting OTM for that reason when it can help your business, is simply irrational.

     

    The complaint over “fee’s offered”, get real that happens in all walks of life and just about every agent has done it themselves at one time or another to get business. I do wonder sometime if the negatives on here are actually from RM and Z reps (but not all).

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  16. GPL

    To clarify my earlier comment, I think Our Industry only needs 1 UK Digital Advertising Portal when we look at National Coverage as a “catch-all” for Online Property Ads.

     

    Way more important….. Our own Websites should be the focal point and that has been echoed on here by many so it’s a given that we all focus on our own websites when it comes to Online Brand Promotion/Enquiries/Other Services etc.

    In reality, we all pay Rightmove so they can advertise their own brand to the home buying public, and RM effectively convince the public they need to be on RM. That’s the revolving comedy part – we pay them to advertise their brand? Any Agents that wish to send me money so I can promote my brand, feel free!

     

    In the meantime, I drive my local marketing/website/branches and await a UK Portal that can deliver National Digital Advertising at a sensible price.

    I tried OTM and it failed. I am with Rightmove and it is overpriced and not fit for purpose, so like many others, when I decide I have a suitable alternative I will Terminate Rightmove.

    I’m reviewing Zoopla to see if it offers what I am looking for. We’ll see.

     

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  17. LTree

    Ha Ha – almost comical,

    “2019 double digit rises” we hate Rightmove, they keep putting our fees up, this can’t go on, the markets bad, they are gonna drive agents out of business, blah blah blah,,,,,,,,,have you tried OTM lets make a stand they are only fifth of the cost …. we hate otm, I don’t wanna be the first to switch, I don’t like Ian Sprigget etc etc….. Tell you what I’m just gonna sit tight

    “2020 more double digit rises ” we hate Rightmove, they keep putting our fees up, this can’t go on, the markets bad, they are gonna drive agents out of business, blah blah blah,,,,,,,,,have you tried OTM lets make a stand they are only fifth of the cost …. we hate otm, I don’t wanna be the first to switch, I don’t like Ian Sprigget etc etc….. Tell you what I’m just gonna sit tight.

     

    To be honest it’s pityful,  I’m passionately against Rightmove literally robbing us (hence the reason we left a year ago) and I genuinely (used to) feel sorry for the agents still paying over the odds and being “mugged” with increases, twice this year in some cases. But watching from the sidelines the pathetice apathy from agents leaves me feeling, if don’t grow a pair, take a chance and switch (because it will work if everybody gets on board customers will follow and find properties whether they go) you all pretty much deserve what your receiving and what you’ve got coming AGAIN next year… it’s like watching a depressing version of groundhog day.

     

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  18. J1

    Listen everyone – this is how it really is.

    The corporate’s and larger regional’s don’t pay the same high rate as the individual agents.

    Until they pay the same (which they never will) Rightmove will endure.

    In area’s where the corporate’s are strong, the independents will have to stay on.

    Look to your competition and decide where your investment in portal advertising is best placed – no corporate’s? – choose another portal – corporate’s? You need to be on RM.

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    1. WiltsAgent

      Can’t think of a town within 30 miles of me where the Corporates could be considered strong.

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    2. Woodentop

      Actually there are more independents than corporates. If only independents could get it, they could actually be the ones leaving the corporates out in the cold. The customer doesn’t give two pennies for corporates, that was side lined two decades ago with the internet coming of age and one reason why so many of them are in debt, keep shelving plans and branch closures.

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  19. Andrew Goldthorpe

    I believe the argument boils down to what agents consider to be the right price; if they have the imagination to support a 100% independent legitimate mutual; and if they value their data enough not to pay through the nose for the privilege of gifting it to the corporate portals or gift it gratis to the so called “free” portals.

    Is giving data gratis to a “free” portal the right price? What happens to that data when the advertisers and investors of that portal want to cash out? Most exit strategies for non-impact investment are of the order of three years. PropertyMutual curates and silos our agent’s data in our data lake so that it cannot be exploited by unauthorised third parties.

    What about the investors in Agents’ Mutual who signed five year contracts on the promise that they would never pay more than newcomers? What about the de-mutualisation and all the other broken promises, the cash burn and the increasing likelihood that more cash will need to be raised, further diluting share ownership? I believe OTM lacked the imagination and courage to be different and is simply “LocationPrime”, or “RMv2”. As soon as it de-mutualised, it started the same journey as the other corporates.

    A legitimate mutual cannot and will not make rash promises and raise funds from any outside source as that would immediately de-legitimise the mutuality. That is why PropertyMutual grows organically, without locking agents into five year contracts at high subscriptions, burning through their cash, and then having to say “sorry, we ran out of money again”.

    So is our current inventory growth subscription of £10 per month per office, the equivalent to a cup of coffee a week, the right price, the right investment in agents’ future? The math, and our transparent staged subscriptions based on member numbers, suggests that if the industry would adopt PropertyMutual en-masse, the “right” solution to raising mass media marketing funds, entirely independently, on an annually recurring basis is in the industry’s hands right now.

    PropertyMutual is a member of Social Enterprise UK and has a charitable assignment condition meaning we cannot be sold to profit individuals. We continue to trust that our ethics and credentials speak for themselves and will over time prove sufficient motivation for agents to subscribe, in the realisation that there is a better, fairer and more imaginative way to run a property marketing platform.

    PropertyMutual has always been the mutual that OTMv1 members thought they were signing up for. They are more than welcome to join us when their OTM sentence ends.

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    1. Property Pundit

      Nice ad.

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      1. Woodentop

        Or an attempt at one and failed.

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  20. Property Pundit

    If agents could increase their fees to match portal rate increases or, better still, charge out for portal advertising (like many used to with newspapers), all these arguments would be redundant. More chance of finding Shergar on the moon of course.

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  21. Philip Norgan

    After many months of hard analysis, a complete lack of customer care and a total ignorance of the market we’re in, we ditched Rightmove in June 2019 and have never looked back. The saving of £1600pcm has gone towards training and a more diverse marketing plan, we don’t get the irritating price increases every 6 months or every year, depending on what mood they’re in and we don’t have to stomach the incredulous approach of their staff.

    In our final week, we were called daily. A huge leap from no contact for 6 months. The final straw was a lady who came out with the immortal line “but we’re Rightmove” when it was suggested by us that in 5 years time their business model could look completely different if agents keep walking away, as they are now. When we pushed her on what she meant by “we’re Rightmove” she expanded it by saying “we’re too big to fail”. How do you like that? The only company in the entire world that’s TOO BIG TO FAIL. Amazing.

    Since leaving Rightmove, we have found we have more time on our hands to do more productive work. We are not chasing complete timewasters who send through enquiries at stupid o’clock and then don’t return calls or emails and, best of all, we’re not being lectured to by a behemoth organisation who make no attempt to understand the individual dynamics of their customers.

    As we have tweeted, many times, agents who want to get value for money from their portals need to seriously look at what Rightmove generates compared with the return it gives those agents. If you’re getting a sensible return for your investment, then great. But if, like us in March, each enquiry (not lead) worked out at £151, then it’s time to say goodbye.

    As one of our vendors said “if Rightmove went bust tomorrow, it wouldn’t stop people buying houses”. So true.

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    1. Property Pundit

      We just need 20,000 other agents to read this post and follow suit. But they won’t, will they?

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  22. gardenflat

    Unfortunately RM’s eventual loss in revenue will not be down to agents leaving by choice. If we could come together as an industry we would have done it by now.

    They will be hit hard by the agents that were hit hard and their loss in revenue will be due to their inability to adapt and engage with their client base.

    The increase in fees for the remaining subscribers to make up their shortfall is now reaching boiling point. There is only so far they can go before they alienate the rest, we all have our tipping point!

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  23. HIT MAN

    Scaredy-cat scaredy-cat sitting on the door step… grow some B***s and RMEXIT….. joint the many of prosperous Agents who only need to sell 2 properties a month to make a profit instead of selling 4 just to pay Rightmove… suckers… RMEXIT…

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  24. SLF

    HIT MAN

    RMEXIT….love it! Lets see it well used.

     

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