OnTheMarket admits agent cancellations running higher...

Andrew Stanton PROPTECH-PR A Consultancy for Proptech Founders
10 July 2023 08:23 AM

Given the economic backdrop, and the slowing market, and in a month I speak to around a hundred different agents, cost cutting is uppermost in the minds of agency owners, so I would have been amazed if some agents had not cut back their OTM subscriptions, having to take a decision on where to 'save' cash.

In my opinion, and I have no commercial link to Jason Tebb, as he is not a client of mine, OTM out of all the property portals represents the best value out there, and it is clear that it is being run by a an ex-property professional, this knowledge guides Jason's battle to help agents and other clients of OTM to modernise their businesses, and he is delivering a great UX to the end client.

An example being if you look at the 'clunky' and outdated Rightmove journey, when looking to find a property, this interface is a decade out of date, and like driving a first generation skoda, in contrast OTM are testing out in Beta mode, the ability to 'talk' to their portal and use technology which replicates the neural pathways of the human brain, so supporting innovative OTM Vs paying 17% increased fees to Rightmove for the same old 'tosh' is a no brainer.

Micky Bricks
10 July 2023 09:43 AM

it may be clunky and outdated, they may whack their fees up year on year- I would thoroughly support any argument of them being unjustified and a spit in the face of us all, but until we as an industry push back against it in numbers- we are shot out of luck. Whilst the public assume that 'everything goes on rightmove, everyones on there and rightmove is how you sell a house' we unfortunately will need them.

Australias equivalent to rightmove did exactly what rightmove are doing, but unlike us our Aussie colleagues have RE institutes and fought back, they also had a strong second portal option to switch to. The end result was the portal in question took a long look at itself and worked more collaboratively with agents.

David Randall
10 July 2023 08:43 AM

This is where Rightmove will gain market share. Agents are cancelling OTM to subsidise the extra RM costs. Agents are too afraid to cancel RM, so ultimately it will be the lesser portals that bear the brunt of it.

Sean Jones
10 July 2023 09:15 AM

I am seriously considering cancelling my subscription with OTM, but not due to costs.

The business relationship that they have created with L&C Mortgage Brokers conflicts with their client base. Why would they create such a relationship when most of their Agents provide these kind of services ?

This revenue could have been generated by providing these leads on a paid for basis to their subscribers and further supporting their agents.

This completely contradicts why I joined OTM when it was first formed.

Find Properties
10 July 2023 11:23 AM

Completely agree, Sean. Agents should be monetising THEIR data 100%. Not taking a cut from a portal because they've had the opportunity to monetise the data first. I've not checked the 'OTM Money' service, but I would imagine removals, surveying and conveyancing referrals will soon follow! Talking about 'follow', give us a follow on Twitter @FindPropsUK if you want to monetise your own data 100% one day.

Scott Leaf
10 July 2023 11:32 AM

They explained to me that the business relationship with L&C is for agents who dont have a financial services function so there really isnt any conflict here. Our BDM has told us that any agent that doesn’t want L&C on their listings can opt out or replace with their own chosen mortgage broker which helps us make more money. Other portals have deals with large banks... Rightmove have Nationwide, Zoopla have Halifax. This means that any consumer interested in a mortgage and uses there calculator is exposed to these two brands first. The way I see it they are helping us make more money from FS

Find Properties
10 July 2023 11:54 AM

Genuine question for anybody with more info than me.....

With more agent cancellations and/or more share options issued by the Plc, could agents ever become the minority shareholder?

And when OTM refers to being majority-owned by agents, is this largely factoring in the bigger shareholders such as Spicerhaart, Savills, Knight Frank, Chestertons etc?

Brett Stone
11 July 2023 13:26 PM

Answer in the next post. Hopefully that's helpful.

Brett Stone
11 July 2023 13:24 PM

Yes and yes.

There are currently 80.1 million shares in issue and approximately 6.8 million options outstanding which may become shares in the future.

My understanding of the current ownership (rough numbers)…

45 million shares are owned by around 3,600 agents
35 million shares are owned by employees, ex-employees and others
6.8 million options are owned by employees.

Of the 45 million shares owned by agents, the 10 largest own around 7 million shares or or around 9% of total shares in issue.

It’s probable that the total shares will keep increasing, with new shares issued to employees and new agents and more options granted to employees.

Around 19.5 million new shares have been issued since IPO.

As to the mix, it largely depends on who decides to buy and sell in the future.

Keep in mind that agent cancellations and agent share ownership are two different things. For example an agent could cancel their listing contract and keep their shares or sell their shares and keep their listing contract.

It’s also worth noting that voter turnout has been very low in the past with only 19% and 21% of shareholders voting in the last two AGMs.

It’s probable that the non-agent shareholders are more likely to vote as they have processes in place to do so than all the 3,600 agents.

The means in practice the non-agents would likely win any head to head vote against agents as it currently stands.

Hopefully that’s helpful.