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TODAY'S OTHER NEWS

Rightmove charges blamed for helping some agents go bust

A free-to-list portal says the costs of listing on the established sites - especially Rightmove - are contributing to estate agencies going bust.

“Property portals make money by charging to list on their site, regardless of a sale or let being made. Depending on the quality of listings, brand notoriety, area of operation, and a whole host of other factors, you could end up paying a fortune to a portal before you even generate your first lead” says Christopher May, director of Residential People.

And he says those portal costs are contributing to as many as 10 agencies goes bust each week, with Rightmove named as the chief culprit. 

May says the number one portal has been accused by agents of charging crippling fees and putting the squeeze on independent firms, many of which are now beginning to voice concern about their situation. 

“Property portals are undoubtedly a main driving force for the industry and are here to stay, but what good is a portal without the agents supplying the properties?” asks May.

“In theory, portals should work for the agent not against them, yet in practice this rarely is the case,” he says.

He says the major portals justify their charges by suggesting the cost is a trade-off against leads generated and the profit an agent makes from successful leads. 

But May says that with more agents suffering narrow margins, and some being required to pay additional costs to hire digital marketing experts, many now seek alternative ways to market and increase exposure of their inventory.

In November Estate Agent Today reported a claim by the property management firm Apropos by DJ Alexander that around 10 agencies had gone bust every week in Britain during 2019.

The firm analysed official data and found that 371 businesses dedicated chiefly to the selling of homes had entered formal insolvency proceedings in the first nine months of the year - 348 in England and Wales and 23 in Scotland. Apropos returned to the same theme last month, claiming more agencies would go bust this year.

Residential People lists some 950,000 properties from a number of countries, and does not charge agents.

“Although we are wholly about marketing property - much the same as any other portal – in the main we do not rely on gross revenue from an agent's monthly subscription” May explains.

“While Residential People is a free-to-list platform, we have other means of deriving income through optional features. In the long run, our business model allows us to develop our proposition into other areas, much in the same vein as Amazon has done at the other end of the scale.”

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    • 21 February 2020 08:27 AM

    We used to spend as much in a week on newspaper advertising as Rightmove charge us for a whole month.
    Don’t blame Rightmove, the reason agents are going bust, is they are not selling enough property.

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    Rightmove effectively make cartel prices by having set price structures, they control fee structures at most agency’s and reduce buyer and vendor choice in agents, if two agents arranged prices they’d be banned for cartel actions. Portals should be paying agents for the data they get and the traffic listings bring to there sites, agents are too stupid to get themselves out of problems but if they just stop using Rightmove the buyers will look elsewhere! And there would be a better industry and market place for it, anti Rightmove action should start with a month of removing listings and paying the 1800quid to a charity, if every agent did that we’d solve a feck load of social problems and show Rightmove who had the power.

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    portal costs are a drop in the ocean compared with the overall cost of running an office, stamp duty on second homes, crooked banks causing melt down have more to do with closures that portal prices.

  • Paul Barrett

    Afraid there needs to be a cull of EA.
    There are simply too many in the market when there is insufficient product supply for them all to survive.
    Fighting over the scraps is what is currently occurring.
    A rationalisation of EA needs to occur.
    Unfortunately there aren't many barriers to entry to be an EA.

    Perhaps by the qualification requirements etc there will be a natural culling of some EA leaving those remaining able to survive with the stock that is available to market.

    Everyone wants EA to be on a stable footing.
    Currently there are simply too many in the marketplace to allow this to occur.
    This goes for LA as well.
    Licensing appears to be the only effective means to achieve a drastic and vitally needed cull.

    It worked in the IFA and mortgage introducer market.
    90 % of participants left overnight leaving behind an effective cadre of fully qualified IFA etc.
    You simply do not need 5 EA and LA on one High St.
    Two as a maximum would be all that is required.


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    I saved my business by sacking Rightmove, following the tenant fee ban I had a choice between laying off a member of staff or reducing overheads, so after analysis of outgoings I decided to leave Rightmove and send a member of staff on a social media marketing course, I use OnTheMarket and Social media and my business is performing better now than when I had RM. its not until you leave RM that you realise that there are alternatives, I do miss paying them!!! Ha...

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    Funny how the people who actually have the savvy and the balls to quit RM all say they don't miss it and business has either been stable (no effect) or it has improved. How many have to leave before agents wake up and realise IT IS JUST AN EXPENSIVE WEBSITE and one that also removes your chances to offer ancillary services to sellers/buyers.

     
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    I'm waiting for the day that Property Pundit finally says something meaningful or something everyone actually understands. Just sounds like a RM fanboy to me with an ironic username totally opposite to what he is.

     
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    Everybody talking about Leaving Rightmove but only a few actually doing it, which means the remainers have to pay the price, good luck to all you RM subscribers..Suckers!

  • Paul Barrett

    I'm not sure how effective it is but by all accounts I hear that many people also use facebook marketplace to source rental property and properties for sale and that is FREE as far as I am aware.
    So if I was now searching for rental property or to buy I would currently use these resources

    RM
    Zoopla
    OTM
    Gumtree
    Spareroom
    Facebook marketplace

    Then perhaps papers or ads in newsagent windows or supermarket info boards.
    Not forgetting of course boards outside properties which can of course be put there by any homeowner without needing a EA.

    So if I was an EA I would use only the free offerings which is FB and Spareroom.
    It seems many people are now automatically searching FB along with the traditional searching on the 3 major portals.

    Carrying out searches of individual EA websites is simply just too time consuming which is why people like using RM etc.

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    Perhaps OTM should give all New Agents a free month /no contracts etc just to show them it works

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    • 21 February 2020 16:33 PM

    Yes major but dont you think OTM is just another Rightmove waiting to happen.

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    Is 1,000 people looking at your properties better than 800? The answer is yes. Free to list portals such as Residential People have my entire support. Took me literally 2 minutes to register on the site, 1 email to connect the feed and now we're getting free leads over the last 6 months? even if its lower than Zoopla. It's FREE.

    I do not see RightMove being where they are in 10 years time. I am confident they will be dethroned by Zoopla but they're not too different in terms of business model so even Zoopla won't be keeping the throne for long.

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