The UK property market is on the brink of a seismic shift. Recent news that Rightmove could be the target of a takeover bid by Australian listings giant REA Group, hard on the heels of US behemoth CoStar’s acquisition of OnTheMarket, signals a potential power struggle in the online property portal space. For estate agents across the UK, this could be a moment of reckoning.
The mere hint of REA’s interest in Rightmove, fuelled by its majority ownership under Rupert Murdoch’s News Corp, has already sent Rightmove’s shares soaring. If the takeover materialises – and the clock is ticking, with a deal required by the end of the month under UK takeover rules – industry dynamics could shift dramatically.
We could soon see these giants battling it out for the top slot in the portal market, which might seem like a win for agents hoping for more competitive fees. However, this potential battle for supremacy could have deeper implications that go far beyond mere portal charges.
What isn’t being discussed – and what could have an even more profound impact on the industry – is the increasing cost of digital advertising, driven by these same portals’ relentless quest to dominate search engine rankings. For many local agents, the cost of competing in this digital arms race has become almost untenable.
At Spicerhaart, we’ve crunched the numbers across our seven UK-wide estate agency brands, and the results are alarming. Running a Google PPC (Pay-Per-Click) ad campaign is now costing us a staggering £184 per booked valuation. In some regions, that figure balloons to an eye-watering £441 per valuation.
Simultaneously, portal costs have soared, averaging £268 per valuation. Not only are these portals monopolising our data, but they’re also outbidding us in every direction. It’s become a situation where we’re effectively being forced to compete against ourselves.
This unsustainable landscape has forced us to re-evaluate our marketing strategies. While digital has long been hailed as the future, the escalating costs and diminishing returns have led us to revisit more traditional methods.
In a surprising twist, we’ve found that one of the most effective returns on investment in our current marketing mix comes from an age-old strategy: direct mail. Contrary to popular belief, direct mail isn’t dead. In fact, it’s thriving when executed correctly. We’re running a campaign where we identify potential buyers’ needs – always with their consent – and target properties in the desired areas to see if homeowners are willing to sell.
The results speak for themselves. A bulk mail shot costs us just 22 pence per letter and has generated over £280k in net profit in just two months. Such success would have seemed unthinkable just a few years ago, but it underscores a vital point: direct mail carries a personal, human touch that digital often lacks.
This isn’t to suggest we abandon digital marketing altogether. Our proprietary FLINK software, for example, generated over 1 billion impressions and attracted more than 15 million clicks last year alone. Digital platforms remain a crucial component of our strategy, but they must be balanced with more tactile, personal forms of outreach.
As we navigate an increasingly AI-driven landscape, my biggest concern is that we’ll lose sight of what initially attracted clients to our brands: authentic connections and trust. The industry needs a broader discussion about the spiralling costs of all marketing channels – whether digital ads, portals, video content, or even traditional billboards.
In the midst of these changes, I’m reminded of the importance of simplicity. Sometimes, the most impactful strategies are those that reconnect us with our roots. That’s why, despite the digital noise, I’ll be placing a humble “For Sale” board in the ground – a small but powerful reminder of what truly matters: building genuine connections with our clients and communities.
As we face the future, let’s not forget that the most effective marketing strategies are often the ones that bring us back to the basics, where the focus is on people, not just profits.
Paul Smith is executive chairman of Spicerhaart
Rightmove shares surge after Murdoch-owned rival considers bid
REA’s takeover of RM would be bad news for UK agents. Rightmove has already announced (November ’23) its plans to increase monthly per-branch fees to £2,000 by 2028. And that’s an average, so smaller agents are going to be paying more. REA +will+ bring in new and creative ways to part agents from their hard-earned (they charge per property in Oz) – and even with CoStar’s best efforts it will take a long time for OTM to make enough of a dent in RM’s power, particularly if agents continue to convince vendors that Rightmove is essential to get the best price for their homes.
As Paul says, it’s agents’ own data on their areas and clients / prospects that will make the difference in the end – the stuff that the portals don’t see. Used properly, AI leverages the uniqueness of each agent’s history, team, reach, area, offices and proprietary data to maximise their credibility as a community hero. It can be used to better isolate homes for Direct Mail but also to emphasise exactly what makes the agent unique in the first place.
It’s also dead cheap – which is what scares the dominant portals even more …
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I disagree; Rightmove is getting seriously past its sell-by date. It’s like a doer-upper—once the big house on the street everyone wanted, but now in need of updates like wiring, plumbing, windows, and insulation. Just as the MIRAS crash from 1988-1994 marked the decline of printed press advertising, the SDLT slowdown has coincided with a tectonic shift in technology.
With 12 potential bidders, if Rightmove were to be sold, there would be at least 11 serious heavyweight organisations eyeing up the development site next door. They could build a Grand Design without the refurbishment costs. The current >70% profit margin acts as a burden on Rightmove. A buyout by any of the 12 potential buyers would leave the remaining 11 firms without the need to manage a £6 billion+ spend.
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Good post Robert – but I’m not arguing that RM isn’t old and a cr @p user experience (it’s both), I’m arguing that REA’s takeover would be terrible for the industry because they’d spruce it up and drive hard to get their £6Bn back (from agents and also possibly vendors). This will hoover up even more wallet that could (and should) be spent on other innovations in the sector.
11 other suitors aren’t looking to spend £6Bn on coming into the market and building something amazing – they’re wanting to buy the country’s largest proptech company which has been a cash machine for decades and suck it (and its customers) dry.
The only things that will set Rightmove back will be agents stopping talking about it (so that vendors aren’t constantly told that this is critical for their best price) and them embracing new tech (and AI is this new tech) to discover what they can do better / cheaper. With RM’s relentless and ruthless price rises, we’re in ‘boiling frog’ territory for a great number of small agents who will be fried before RM has finished whacking their prices up.
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That’s the whole point of the tectonic shift happening in the agency world. Rightmove’s outdated, legacy technology is struggling to keep up with rapid changes and disruptions. All legacy systems, with their expensive and inflexible nature, are being challenged by new models.
The aggregating portal model is being disrupted, and OTM (OnTheMarket) is well-positioned to adapt to this changing landscape. With recent shifts in leadership within the corporate agency world, the old power dynamics are evolving. Instead of traditional figures like Grenvile and the Davids dictating terms and forcing agents onto Rightmove and Zoopla, new influencers are emerging. These new leaders are more forward-thinking and focused on the future of the industry.
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How much coroporate bull+++t can a person get in a few lines LOL
Fact is RM is the best portal out there at the moment
It is easier to use than any of the competition
Everyone who is looking to buy or sell a house looks at RM before anywhere else
Things may change in the future but for the moment RM is the market leader
Currentlyy I know no one who looks at aso called influencer to buy a house – we have tried it and it fell totally flat
Most buyers are not idiots who care about a so called influencer
I have never met a grenville in my life – I guess you have a problem with middle class agents ?
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Sorry Jan you are not keeping up with the conversation, not understanding the subject
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I share your enthusiasm for what CoStar / OTM could achieve, also like to see what new challenger Jitty can do – things are happening but REA grabbing Rightmove will still create real problems.
Also optimistic that new leaders are emerging, just hopeful that they can wean their clients off the entrenched belief that RM is essential to selling their home for the best price. It’s not. But will the public believe it soon enough?
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The takeover bid by REA Group is yet another sign that UK estate agents are easily fooled, willing to pay whatever Rightmove demands, making the UK market an easy target.
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Agreed totally
When I was an agent to local paper charged £1000 a page
All agebnts in the ton met and agrred we will all come out
Hey presto price per page reduced to £250
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So, are you suggesting that if all the agents united and told Rightmove they were leaving, you believe Rightmove would reduce their fees by 75%?
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That’s some PPC spend. Ours are £34 per qualified & booked valuation.
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Just look at what happened in Australia, they had a “portal war” and now all the agents pay double what they did prior.
This is gaslighting on an epic scale!
We need to take back control from the portals by saying No.
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Here’s my two penn’orth.
All the above are valid. Add to that the growing use of social media for all things in life, plus FB and Zoopla going into cahoots with each other, which failed, which all means that the end is nigh for internet property sites. Almost certainly not in my lifetime as an agent. I’m 61 and been doing this trauma for 22 years. But definitely not too distant in the future. Look at where we have come from. Newspaper advertising in black and white outsourcing brochure 26 at a time. Rightmove, at the start, only allowed 3 photos, 100 characters in the short description and some agents paid for a certain number of live properties, which meant they had to ‘rotate’ their stock, similar to the window display.
We are definitely at a turning point, the in between stage of old style advertising and totally paper free, digital marketing. Older clients like the personal touch. They like to physically sign the terms, have a brochure and don’t do e-mails. But these ‘older’ clients, who are now 20, won’t want that in the future. Some of what I have read smacks of the type of ‘head in the sand’ attitude when Rightmove first started. ‘That won’t last’….Look at it now.
So, in conclusion, Rightmove are making hay while the sun shines and would be mad, at some point in the near future, not to sell. Pretty much like the owners of PB selling…What a great decision that was. Timing in this industry is everything.
JC
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And there you have it
If you want to make a staggering loss across your business and only grow Lettings by only 2% while focusing and investing heavily in it – send a 22 pence letter
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I don’t understand why EAs are worried to ditch RM. When I was looking for a property – alongside RM, Zoopla, openrent, I was checking every EAs website daily too until I realised that they have all their ads on RM anyway, so it’s not worth the time. This is the biggest purchase in most people’s lives – they will make effort. If there was a single agency that wouldn’t have all their properties on RM – I would happily subscribe to their mail and check their website every day.
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