OnTheMarket has made a defiant response to news that Zoopla is growing both its estate agent membership and its property listings - but most City analysts say Zoopla's latest figures are good news for the number two portal.
Ian Springett, OTM’s chief executive, says Zoopla's growth of a net 213 agents in the quarter to the end of July is “tepid” and “a drop in the ocean in the context of its 23 per cent loss of agents (which equates to 3,812 agents) between September 2014 and March 31 2015.”
Springett says: “Support for OnTheMarket continues to increase daily and with such a strong desire for it to succeed from agents all across the UK - and a substantial growth in its traffic figures to more than 5.2m visits in July.”
He says the new portal can “ultimately achieve our objective to develop a proper alternative to the market leader” - although in his latest press statement he makes no reference to the claim made earlier in 2015 that by next February OTM would be the number two portal.
Meanwhile City analysts have boosted their financial ratings for Zoopla and some anticipate that its recent boost in membership may herald the defection of agents from OTM.
Canaccord Genuity has raised its share price target for Zoopla to 280p from 220p and says: "Zoopla's management is innovative and creative. It has handled the threat from OnTheMarket and its UK agency membership is now growing."
Global investment consultancy Jefferies - which advised Zoopla on its stock market debut in 2014 - says Zoopla’s trading statement yesterday heralded a turning of the tide.
“In our view the net growth and reduced churn of agency branches demonstrates that those that left the platform to join OnTheMarket have found it wanting, despite the relaxation of the one other portal rule. Over the next 12 months we expect many of the 3,000 or so Zoopla leavers to return” says a Jefferies statement. OTM has denied that it has relaxed its 'only one other portal' rule.
Numis says the Zoopla trading update was "solid" and the portal’s prospects were "encouraging” while the City AM business newspaper says while Zoopla was clearly hit by the launch of OnTheMarket at the start of 2015 “it's beginning to look like those effects were short-term.”
Zoopla’s statement to the City announced that it had seen a net growth of 213 estate agency branches in the period from April to the end of July which took its total UK agency membership up to 12,556. It also had 2,672 new home development members, 684 overseas members and 219 commercial members taking the total number of members at the end July to 16,131.
The listings inventory had grown seven per cent from 828,000 to 882,000 properties over the same period.
Traffic was also strong, with 45.6m monthly visits on average between April 1 and July 31. It also claimed to be sending “record numbers of appraisal leads to members, up 103 per cent over the same period last year and helping our members win more business”.
Zoopla shares closed yesterday up for the second successive day.