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TODAY'S OTHER NEWS

Rightmove's new fees cut just kicks can down the road, say campaigners

The Say No To Rightmove campaign says the portal has merely kicked the fees can down the road, deferring a long-term decision on how much to charge agents.

Earlier this week Rightmove - which is currently cutting charges to agents by 75 per cent - extended the discount period but reduced the discount itself.

Agents in England will get a 60 per cent discount for August and 40 per cent for September; those in Wales and Scotland will receive a 75 per cent discount for August and 60 per cent for September.

Now a statement last evening from the Say No To Rightmove campaign takes the credit for both phases of reduction.

“We have achieved significant short term discounts from Rightmove. Neither the first four-month discount nor the most recent two-month discount working back towards full tariff have been voluntarily given. Furthermore, at no stage have Rightmove directly addressed their customers - UK estate agents” says the campaign. 

Rightmove earlier this week admitted a relatively modest four per cent loss of advertisers, and this is picked up by the SNTR campaign, which says: “It’s further interesting to read that Rightmove preys on the insecurity of its clients and their fear of leaving instead of motivating them to want to stay for true overarching customer service and value.”

It continues: “Unless we have missed something, the issue has not gone away. Reading between the lines, the only promise we can see from Rightmove is that 2021 (or before) will see a return to full tariff and beyond.”

And it asks: “Will the 600 agents that have left Rightmove thus far this year turn into 1,000 by the end of June, and even more between now and the end of September?”

Meanwhile analysts have suggested that Rightmove’s future success depends largely on how quickly the Coronavirus outbreak ends and whether its dragging on into the second half of the year means more agency closures - and thus fewer fees.

That view comes from Hargreaves Lansdown, an investment and savings consultancy which makes frequent assessments of the UK housing market and component parts like portals.

Rightmove earlier this week said it was extending, in part at least, its reduced fees offer to agents in a bid to help the industry through the Coronavirus crisis. But in doing so it admitted to its shareholders that such a move would impact on profitability.

It also revealed it had lost just under four per cent of its advertisers - fewer than many observers anticipated but contributing to a more perilous position for the portal’s income.

Now Hargreaves Lansdowne says that while it remains highly profitable in the long term, Rightmove faces a series of short-term challenges.

“With the housing market likely to get worse before it gets better, we expect it to be a challenging few years for the group” says the consultancy, which adds: “So as long as estate agents weren't closing, the fee [to Rightmove] was paid and it was business as usual. However, estate agents are struggling and coronavirus has turned up the pressure.”

It goes on to tell its investor clients: “Struggling businesses and high unemployment are not ingredients for a sustained housing boom. As the UK is weaned off furlough schemes towards the end of the year - we expect the worst is yet to come. The result could be more of Rightmove's customers going out of business.”

The consultancy puts this in context by saying that a decade ago many agents spent as much as £2,500 per month per office on print media - making today’s average Rightmove fee of £1,100 per month per office appear less harsh than some suggest.

But while it says Rightmove's dominant market position should stand it in good stead once conditions return to normal, it adds: “But normal is looking increasingly far away which is going to hit earnings this year at least. For now the dividend is suspended. The full extent of the damage will depend on how long the disruption lasts, and how quickly the economy recovers.”

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