What is the latest state of play with Agents’ Mutual?
The response has been excellent and we are gathering commitments at a much faster rate than we had anticipated. We are already over three-quarters of the way to our first milestone of 1,000 ‘Gold’ member offices. Those who are not choosing our Gold membership, which requires a modest upfront financial commitment, are almost all interested in taking one of the other membership types when they become available.
Do you think that the site is looking too London-centric?
We are committed to delivering a portal for all agents across the country. I am finding that agents everywhere get what we are seeking to do and are coming on board. Of the offices signed up for our Gold membership thus far, just over 50% are outside the M25. Our registration base is skewed more towards regions outside London. We are only just getting started on talking to agents around the country but we already have some very prominent firms on board from Scotland, the North of England and the West Country.
Do you think it is looking too upmarket?
It is the case that the founders operate in the higher-value segments. The venture had to start somewhere and their backing should give confidence to all that the project will be professionally run. Many firms operating in the mainstream of residential property are signing up as all involved understand that the overall objectives will only be achieved if the new portal serves ALL agents.
In discussion with agents in all geographies and value segments, I find there is strong commonality of view on what is needed in the portals market. And the way to deliver low listing fees is to spread the costs of running the portal across the largest possible number of agent offices.
How will you ensure it really is broad-based?
Work hard to get the Agents’ Mutual proposition in front of all independent agents. As I said, they get it when they see it.
Do you think it will be successful and what does the timeline now look like?
We have strong backing, a viable financial model, an entry strategy which can disrupt the market, and experienced management. For some time, most agents have known that an undesirable position has been emerging in the portals market, and many have been clear on what the solution should be.
Agents’ Mutual is the vehicle for agents to commit to so as to deliver that solution. If enough do, it will be successful. The early signs are very positive and momentum is building. We expect to be moving to implementation stage later this year.
You sold PrimeLocation, which was an earlier run-by-agents-for-agents model. Is there a chance that exactly the same could happen with Agents’ Mutual?
Primelocation (Fastcrop plc) was a company limited by shares in which some agents invested equity share capital and subsequently chose to sell, making a considerable return on their original stakes.
Agents’ Mutual Ltd is a company limited by guarantee so there are no shares or shareholders and funding is by way of loan capital. Each firm listing will be a member of the company with an equal interest and voting is based on one firm = one member = one vote, irrespective of firm size. The aim is not to create an asset but a service to the industry which will make agents’ businesses more profitable and valuable in the future. There will be protections in place such that 90% of the members would have to vote in favour for any sale to take place.
There has been some criticism of the restriction of agents’ advertising to just one other site. Which portal is likely to be the loser here, and why? Do you think that this restriction is a sound business strategy?
The large and growing gap between what it costs the major portals to provide their service and what they are charging agents for it presents an opportunity. However, the market is littered with failed would-be giant-killers who did not have the resources to overcome the barriers to entry which exist – mainly that the large portals have both property stock and established consumer audiences.
Only the agents themselves can break the duopoly by committing their properties, listing fees and promotional support to a portal they own and control at the expense of the competition. Otherwise, there would be no reason for consumers to switch, too much marketing investment would be required and a third portal would be an additional cost to agents.
The question of which other portal agents choose to retain when joining ours is a matter for each individual firm to decide, but they will all know what they are doing and why.
How will you launch to the consumer and will there be enough money for a really convincing campaign?
The available resources will depend on the level of support we get from agents, especially the number of committed Silver and Gold members. But, as an example, if we had 3,000 committed offices at launch, we would be able to spend more on marketing than either of the two dominant portals did last year to launch the site. As well as powerful central marketing campaigns, we will have strong promotional support from each of our member firms, who will also cease promoting the other portals. The shape of our launch campaign will develop nearer the time, but we will have expert resource to deliver it.
We have created the membership categories to be as inclusive as possible and there is no limit on Gold membership. The ‘entry fee’ for Gold membership requires a £3,600 upfront commitment (of which £3,000 is a loan attracting 15% annual interest) per office. Agents might compare this with what they currently pay in portal fees in just six months and may consider it a worthwhile investment to escape the conveyor belt to oblivion and restore their control over advertising costs and their property data. However, we appreciate that not all will want or able to participate in this way, and we hope the other membership categories will enable all to support the venture.
Do you think Rightmove and Zoopla are losing any sleep over Agents’ Mutual?
These portals are controlled by major corporate groups. I doubt any of their senior executives are losing sleep. That might be less true, though, for the owners of many small and medium-sized agency businesses who are finding an ever-increasing proportion of their incomes are being eaten up by portal charges.
What do you think of Nethouseprices’ attempt to do much the same thing as Agents’ Mutual?
I do not think the people behind NetHousePrices have the same objectives as Agents’ Mutual has.
How can agents find out more about Agents’ Mutual?
In the first instance, they should register at www.agentsmutual.co.uk
They will then have access to our Information Memorandum and related documents and we can contact them to see how best to progress things with them.