Zoopla and Rightmove ‘duopoly’ challenged by estate agents
Homeowners planning to sell in the new year may find themselves the victims of a property website battle sparked by the arrival of an alternative to Rightmove and Zoopla.
On 26 January, a consortium of big-name estate agencies will launch a property listings website, Onthemarket.com, in an attempt to break what they describe as the “duopoly” of the two big property portals.
However, agents that sign up with the site will be forced to choose between its two rivals, which means sellers could see their homes delisted from one of the sites, which between them get 100m hits a month. As a consequence, consumer group HomeOwners Alliance, has described it as a “rotten deal for homeowners that lines estate agents pockets”.
“When selling your home from next year you won’t be able to have access to all the portals with certain estate agents,” said Paula Higgins, chief executive of HomeOwners Alliance. “That restricts the number of potential buyers homeowners can market their house to. This in turn will impact the speed of sale and getting the right price.”
Agents’ Mutual, a not-for-profit organisation run by Savills, Knight Frank, Chestertons, Strutt & Parker and the London firms Douglas & Gordon and Glentree Estates, says more than 4,000 agents have signed up to the website and more are being recruited.
The website is offering members the option to fix the monthly fee for listing properties for five years in what it describes as a chance for agents to control costs in the face of escalating Rightmove and Zoopla fees. However, as a condition of membership, agencies will be forced to sever relationships with either Rightmove or Zoopla, whose parent group also owns Primelocation.com, on or before the website launch date of 26 January.
The two property portals both list about 1.1m properties, with about 16,000 estate and lettings agencies using each site. “A duopoly was created and we lost control of our content and costs, and to some extent our customers,” said Helen Whiteley, commercial director of Onthemarket.com in a marketing video sent to agents last week. “Onthemarket.com was created to put you back in control of your online costs and property content.”
Some of the organisation’s founding agencies have already announced their intentions. Chestertons said last week it would be terminating its relationship with Rightmove, while Savills and Knight Frank have said they will drop Zoopla.
Lawrence Hall, spokesman for Zoopla, said in response: “Agents not advertising on the major portals will be put at a significant competitive disadvantage and risk a lot of unhappy clients who will ultimately lose out by not getting as many viewings or the best price for their property.”
Industry experts have suggested Zoopla will be hardest hit by defections. However, sellers of London homes may instead see their property removed from Rightmove, as Zoopla and its sister portal Primelocation have stronger coverage in the capital. Rightmove also typically charges agents about double the fees of its rival.
Last month analysts at Investec advised its investors to sell rather than hold shares in Rightmove.
“While we see many inconsistencies and mid-term questions over the Agents’ Mutual offer, it could cause some trading turbulence, not helped by a tougher near-term housing market,” said Investec analysts Steve Liechti and Richard Holroyd. “We rate Rightmove highly as operators, but see a dominant business with very high margins on a high rating in slightly more troubled times.”
Agents’ Mutual’s attempt to dominate the property portal market is not just about cost – it is also trying to stamp out the threat of online-only estate agents. Unlike its property portal rivals, it has banned such agents from listing properties on its website.
The online-only agency sector is growing, with a number of launches set for 2015, including the sales arm of easyproperty.com, the latest venture from easyJet founder Sir Stelios Haji-Ioannou. In 2014, 10 nationwide players entered the market, resulting in 62 online estate agents covering the UK along with dozens of others who just cover small towns, according to online agency Hatched.co.uk.
The biggest online only agency, eMoov, filed a complaint with the UK’s competition authority about the exclusion in October and is awaiting a response.
“I run a business that’s trying to disrupt estate agency for the benefit of the consumer. Agents’ Mutual excludes all online agents, which offer lower fees, and I think that’s anti-competitive,” said Russell Quirk, eMoov chief executive.
Onthemarket.com is also trying to garner a competitive edge by encouraging agents to put their properties on its portal 48 hours before listing with rivals. It is not known how many agents have decided to do this.
“Consumers will soon realise that they will need to register with us to see these properties as they come on to the market rather than wait to see them on competitor websites,” said Whiteley, in her video to agents.
Agents’ Mutual claims it is putting millions of pounds into the launch, which will include a TV and digital campaign, as well as national press adverts.
This article is by Lisa Bachelor and taken from http://www.theguardian.com/