Let’s be honest - few people saw this coming. The 89 to 11 per cent majority amongst Agents’ Mutual members for the firm to float was overwhelmingly decisive, so strong it surprised even those campaigning for a Yes vote.
However, questions remain unanswered.
Once a launch date and share price have been agreed, will the float be a success? If it happens, will OnTheMarket inevitably become just a Rightmove/Zoopla mark 2 with investors ultimately governing decision making?
Can a property marketing landscape increasingly influenced by online agencies rather than portals really accommodate three broadly similar competitors? Will the chief executive and those hand-picked founders set to make literally millions from the decision still run the organisation as it retreats further and further from its mutual principles?
And will they eventually sell OnTheMarket to ZPG - and no, this isn’t a joke - as some analysts have suggested in off-the-record briefings?
Estate Agent Today has again assembled its Panel of experts to consider the options available to Agents’ Mutual, OnTheMarket and most of all the agents who will now be asked to support it.
As the panelists are selected because of their strong views, don’t expect them to agree - or to sit on the fence. Thanks to them for contributing their thoughts and thanks once again to you for reading; please feel free to add your own comments too.
Chris Wood, industry campaigner and managing director of PDQ Estates:
“Sadly, much as I hope that the float will reinvigorate OnTheMarket as a major challenger to the asymmetric duopoly of Rightmove and Zoopla, I do not believe it will attract the support or financial backing required to gain any significant ground and its loss of mutual status will not serve the majority of its original members aspirations.”
“Rightmove is an effective monopoly and Zoopla Property Group already has a clear and different business model. OnTheMarket is the model that must be seen to innovate if it wishes to effectively challenge. This will take the sort of significant funding that I do not believe will ever be forthcoming in the short to medium future.”
“There is a huge need for a genuinely mutual portal and/or software system that works for both agents and consumers’ interests alike, that utilises the best of the latest and breaking technology.
“Asking agents to cooperate is never going to happen. Produce a product or service that is a no-brainer for agents and the consumer to use and therein lies the future!”
Mal McCallion, startup expert and high growth business specialist at Growtion:
“Speaking with agents every day, I’ve found the majority of those that have voted ‘yes’ did so because they couldn’t really see another option. Rather play this hand than wait for the next cards that might be way, way worse.”
“More by accident, then, than by specific agent design I think the coming Agents’ Mutual float will provide the burst of competition that Rightmove and Zoopla fear – therefore, if you’re an independent wanting less-steep rises from those guys, congratulations. That’s coming.”
“The big question is what the corporates do. Their support – driven by their share ownership – of Rightmove, then Zoopla, were critical in reaching the tipping-point of each portal’s brand awareness amongst home movers.”
“As each corporate now has its own pet online product to market the hell out of, I’d assume that they will have to adopt OTM. eMoov at the very least will and that will bring in the much-vaunted ‘tipping-point’ of OTM becoming a genuine portal contender.”
“Fast-forward a few years and I’d be astonished if, having fattened itself up, OTM didn’t become a takeover target for the Big Two – or a Google/Amazon looking to get into the market.”
Anthony Codling, equity analyst at Jefferies International:
“In my view, the vote for the IPO has turned the mutual into a monster, the already un-level playing field has potentially become an earthquake zone.”
“I struggle to see how it can square the circle of providing investors adequate returns whilst keeping costs low to members. I appreciate the argument that if OTM is successful in convincing the majority of agents to leave the two major portals it should be able to both make a reasonable profit and reduce an agent’s overall portal spend. However, it has not achieved this goal since it was launched in 2015 and I suggest that the odds remain stacked against it achieving the same goal now.”
“I estimate that the two major portals spend, in aggregate, around £45-50 million each year on marketing. Even if OTM raises £50 million I struggle to see how it will compete and take share from the big two because this £50 million has to cover marketing, expansion of its sales and marketing teams and technology development.”
“The main mistake made by Agents’ Mutual was that it was a mutual in name only: not all were or are equal, not all paid or are paying the same fees and not all share equally in the potential upside, it seems that by mutual agreement Agents’ Mutual is mutually un-mutual.”
Mike DelPrete, a PropTech expert and consultant at media firm AIM:
“Internationally, there is no precedent for a meaningful third portal in any market. Each mature market has two leading portals; it is incredibly difficult, costly, and time consuming to displace them. I rate OnTheMarket's chances of breaking the duopoly as very low.”
“The need for a portal should be viewed through the eyes of consumers, not agents. Consumers want a place they can go to view properties for sale. They already have that in Rightmove and Zoopla. OTM doesn't add anything new to the mix nor any additional value to the consumer.”
Iain White, industry consultant and mentor at Agency Mentors:
“One would assume that Agents’ Mutual will broadly follow the pattern of other PropTech floats but it has been such a rollercoaster journey thus far it would be foolhardy to try and second guess this.”
“Rightmove and Zoopla Property Group should change to stay ahead of consumer trends and demands and make their model the one househunters want to use and that agents find adds value.”
“I do think the charging model requires a price per listing approach as currently it is very unfair that a small business with 10 listings pays the same as a branch with 40 listings.”
“It depends what OnTheMarket’s aims are, but I can't see how a third portal benefits anyone. The house hunter gains nothing, the house seller or landlord gains nothing and the agents gain nothing other than increased costs.”