New online property portal OnTheMarket.com launched this week. Set up by the Agents’ Mutual group of estate agents, it hopes to topple the “duopoly” of Rightmove and Zoopla with a multimillion pound advertising campaign due to hit this Sunday. Critics have called the move “regressive” and “anti-consumer”. Ed Mead explains why he thinks it is the right way forward for the industry.
Analysts and brokers love Rightmove and Zoopla. With £97m pre-tax profit on turnover of £140m (Rightmove, 2013), what’s not to like? In case anyone’s in any doubt about how they make this profit, it’s by advertising estate agents’ properties.
Several years ago, in a darkened basement dining room, a meeting took place between estate agents not overly known for co-operating with each other. Luckily, there was a common bond; chronic irritation with an advertising medium – whose data we supplied – which we all agreed was starting to take the mickey with its ever-increasing fees.
Out of that came a plan for an estate agents’ mutual, OnTheMarket (OTM), a rival to Rightmove and Zoopla owned and operated by a network of estate agents across the country. Those signing up will, among other things, agree to only list their properties on either Rightmove or Zoopla in addition to our website.
Those around the table, plus a few outsiders, provided the seed funding and we recruited the team behind PrimeLocation to make it. The result is OnTheMarket.com, a website driven by agents’ simple desire to offer sellers’ properties on a clean, consistent and efficient site with no third party advertising. The individual agents will still pay fees to display their properties, but those fees will be decided by the mutual. Our original target was 750 participating offices; we’re launching with 4,600, with 2,200 firms signing up.
The site launched with over 250,000 properties and the fees generated will make OnTheMarket an immediate player in the business.
The plan has been criticised for lessening consumer choice, but given Rightmove has around 90 per cent coverage, how does dropping one of the two major websites in favour of ours affect that in any significant way? Besides, is looking at three portals really that much more difficult than looking at two?
About 65 per cent of a traditional agent’s costs go on staff, and it’s staff that sell properties, not the internet. Humans put in 80 per cent of the work getting a sale through – and not all buyers come from the internet anyway. For the 80 per cent of OTM members who have less than three offices, the price rises foisted on them by Rightmove and Zoopla have been crippling and prevented them from seeking other mediums to sell their property. Taking control of pricing and data means they’ll be able to survive and thrive. At a basic financial level, the profits currently flowing into Zoopla and Rightmove’s shareholders pockets can rightly stay within the industry, enabling further improvements to it.
Private sellers and online agents are welcome in the market, if they help to drive standards up, but, in a difficult market, I suspect the public prefers a human touch. The internet provides a lot of things, but personal service is not one of them.