Pay-per-lead prices double - great news for agents

So, lead pricing is on the rise in the UK. Finally.

Without their usual fanfare, pay-per-lead pioneers Property Index have upped their price from "£1 applicants + £5 vendors", to "£2.50 applicants + £5 vendors".  Rumour has it that the old price point is protected for existing clients for some period of time.  Anyone who knows how long, please let us know in the comments below.

How long before Zoopla and Fish4 follow suit.  This correspondent reckons weeks.

On the surface, this is a disaster.  A 250% price rise, makes Rightmove and their price hikes look like a cuddly bear in the corner of the room.  But no, this is great news for agents in the UK.

Why?

By far and away the greatest commercial threat to rising estate agent's portal costs in the UK, is the growing monopoly that is Rightmove.  As they get bigger and bigger, they are building the ability crush everything in their path.  They're pulling away from the number 2, and the number 3 was suffering so much that it collapsed into the arms of a new start up.  Number 4?  Who is number 4?  If you think it's Fish4Homes then they broke to offer the pay-per-lead model so long ago, that I would categorise them as closer in nature to the new generation of contenders for the throne than the old guard portals.  If it was ThinkProperty, they fell into the arms of the same start up too.

If Rightmove do secure their monopoly position, then there will be nothing to keep their prices in check.  £400 per month, become £500, and that becomes £600.  And it doesn't stop.  As their management are happy to point out at conferences, there is plenty of headroom before the Rightmove price point comes close to what we agents pay to the local press (the monopoly of choice from the 90s).

The old battle is over.  Rightmove make enough profit per month to keep their technology platform bang up to date, and that's after their expensive TV ad budget.  Their competitors can't hope to keep pace, they rarely put a foot wrong.  The yellow pages is in a regulated monopoly position for a reason.  Classified marketplaces are natural monopolies, more listings = more visitors/readers = more listings = breakaway returns, pulling away from the competition.

No, our only hope of keeping Rightmove in check, aside from regulation in the long run, is a healthy pay-per-lead economy.

And a healthy pay-per-lead economy requires a healthy price point.  A price point which can sustain the start-ups efforts to disrupt the game.

We can sit here and worry all we like about "oh, but when they're big, they'll just charge us more".  But frankly, right now, and for the next 5 years, a healthy competitive set of start-up portals, biting at the heels of Rightmove, is all that will keep their price point vaguely in check.

Bring on the price hikes in leads.  And let's pay them gladly.  You are signed up right?  It's peanuts in comparison at the moment.  And it breeds a healthy new generation of property portals and search engines.  That innovation and price competition is healthy for all of us.

Lovingly yours,

Trebor