Rightmove’s biggest shareholder has described the site as an ‘all you can eat’ model for agents – and says he regrets not buying more of the shares.
The fund manger of Baillie Gifford, which holds an 8.3% stake in the business, said that Rightmove’s business model is so successful because it is – paradoxically – able to remove itself from the normal ups and downs of the property cycle.
Gerard Callahan said: “The attraction of the Rightmove business to us is that it is not that sensitive to the housing market itself, unlike some of the operationally geared builders.
“Rightmove is an ’all you can eat’ model for estate agents in the UK. They will pay £500 for example and use Rightmove as much or as little as they can.
“It is not transaction based but a flat fee that they generate. The importance of this is that as long as the estate agents don’t go bust and they are still paying the flat fee, then Rightmove can hopefully grow their income.”
Callahan says that his only regret is not doubling the fund’s shareholding in Rightmove when it was hit hard in 2007/2008, when a number of agents closed branches or went out of business altogether.
He also says that any pick-up in the market, resulting from the Help to Buy initiatives announced in last month’s Budget, can only help Rightmove – simply because agents will be happy to pay.
More at the link below.
https://www.fundweb.co.uk/fund-news/baillie-giffords-callahan-rightmove-survives-in-spite-property-cycle/1070212.article
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Comments
Join INEA multi list and you will soon get more instructions SIMPLES forget RM
Every RM story and the same bleats, why try to influce peolple to do something you have failed to yourself, w/d from RM/
Perhaps comment on the story, shock, yes stay on topic, I regret not buying their shares for one, a quality business.
And do they care what is posted, I have never seen them respond once.
Are there no old school agents left?? Surely all the sheep who are on rightmove can't be newbies who 'think' they willl go bust if they are not on it??
I dont see any more growth in rightmove now,,if you have 10% of the company then dividends will be nice because they are fleecing agents.
"With the exception of Zoopla they have really monopolised the market."
Erm... so NOT a monopolising situation, then!
Jeez - you had the opportunity of reviewing and deleting such a dumb statement and STILL you pressed "Submit"...
lm: "in small village locations such as where we are based many agents have a lot les than 100 properties the three established agents in this area have 27,9 and 9 properties for sale making RM very expensive..."
I would then query
1. How much income each of those properties will produce in terms of fee?
2. How many sales these offices will generate in the course of a year?
because it sounds to me like RM costs are the least of your worries!
I would ask you all this “if your not going to pay the RM prices what’s the alternative”? With the exception of Zoopla they have really monopolised the market.
The key thing for me is you need to work out if the cost of an ad is good value for money? Even if you’re paying £100 per ad that’s still excellent value. Take an average South East fee of £5,000 and then consider how many of your property sales originate from RM and I would say you’re getting a bargain.
If you asked any of the public would you like to advertise your house on RM for £100 they would pull your arm off, £5 and you would have a stampede? Given how RM is protecting Estate Agents from in some cases loss of business I would consider their service as excellent value.
PeeBee in small village locations such as where we are based many agents have a lot les than 100 properties
the three established agents in this area have 27,9 and 9
properties for sale making RM very expensive for small businesses.
lm - "for example if you advertise 5 properties a month it works out to £100 per property if you are a large agent advertising 100 properties it works out to £5 per property."
Erm...cople of things here.
Firstly, with respect, if an Agent is offering only FIVE properties for sale at any one time (unless of course they are simply opening a new branch from a standing start...), they won't be open long! Agents with this sort of stock level NEED the power of RM far more than others do - believe me!!
Also, there are many, many SMALL Agents advertising in excess of 100 properties on RM.
Thanks "Peebee" - But that is why i was looking at what the average other agents are paying, helps me to try and get the best deal, Still i am sure RM will put out their cost and that will be that!
The big drawback in Rightmoves policy is that it is forcing small businesses out of business as they cannot afford the large fees. for example if you advertise 5 properties a month it works out to £100 per property if you are a large agent advertising 100 properties it works out to £5 per property. it would be good if they offered a micro business model as well.
'New Venture': I would respectfully suggest that the only way you will get accurate figures for costings would be to contact Rightmove yourself.
Ask 100 Agencies how much they pay, you will get 100 different answers.
It is how much RM/Zoop will charge YOU that is important.
Hi, I am an agent with a fair few years experiance, worked for independents in the past and now work for a corporate (have done for a number of years now) as such i do not know current rates, am i right in thinking its about £650 pcm? Looking at launching my own independent office and just trying to get some figures, as its says £500 in article but thought it was possibly more now, thanks!