The key figure behind the Say No To Rightmove campaign says the fight for more realistic fees goes on – and agents are still joining the campaign hour by hour.
The portal caved in to pressure from agents a week ago and agreed a short-term 75 per cent fees reduction to help the industry through the Coronavirus crisis.
However Robert Sargent, chief executive of the Acorn Group, has today told industry analyst Chris Watkin in a video interview that the campaign now has 900 business owners with more still joining “on an hourly basis.”
Sargent’s company has 36 branches across London and the south east and spends close to £500,000 on fees to the portal.
He says the short term fees reduction was a sign that Rightmove realised the importance of agents who provided its content, but it was simply the portal realising what it had to do for an industry going into lockdown – it was not a solution to a longer term problem.
The core of the issue, says Sargent, is that independent agents pay top dollar – up to £3,000 per branch per month – whereas corporates can negotiate substantial economies of scale and thus smaller fees.
The interview is just under 10 minutes long and provides a fascinating insight into the campaign which has caught the imagination of much of the industry, and what it plans next.
Rightmove has this morning told its shareholders it is “taking appropriate measures” to shore up the company.
It gives no indication of what those measures are but it says in a trading statement released at 7am today: “In this period of unprecedented uncertainty, we are unable to quantify the impact of COVID-19 on our financial and trading performance at this stage. Accordingly, the group is suspending all existing financial guidance for 2020. The board is confident that the company has the financial capacity to withstand this challenging period.”
It has scrapped a dividend to shareholders and suspended financial guidance on how the firm will perform this year.
Shareholders were to have received a final dividend payment of 4.4p per share for the year ending December 31 but in the light of the Coronavirus crisis, that has been stopped.
In a bid to pacify those with a stake in the company, Rightmove has told them: “The board recognises the importance of the dividend to our shareholders and will consider the timing of the reinstatement of the share buyback programme and the quantum of any interim dividend for 2020 in due course.”
It goes on to say: “The strength of our balance sheet and business model has enabled the board to act quickly to support our customers [the offer to agents] as announced on 20 March.”
A week ago today Rightmove revealed it would slash its charges to agents by 75 per cent for four months.
The portal also apologised for getting it so badly wrong with its deferred payment scheme, which was derided by customers – many of which left the portal in disgust.
A statement from Rightmove to agents at the time said: “I don’t think many of us would have predicted sitting in our offices last week that we’d be where we are today, with the possibility of more restrictive measures approaching. Earlier this week we offered our independent estate and lettings agents a deferred payment scheme to help them through the next few months. The situation in the UK has changed rapidly and we’re sorry that it was too little and now inappropriate for the challenges we all face.”
The portal went on to say a week ago: “Instead of offering the deferred payment scheme to independent estate and lettings agents, we’re going to reduce your Rightmove bill by 75% for four months, starting from 1st April whether you advertise residential properties, new homes or commercial premises. You don’t need to apply for this discount, your invoice will automatically come through reduced by 75%. To be clear, this is not a deferred payment, this is a discount that you don’t need to pay back.
Over 600 agents have now signed up to the Say No To Rightmove campaign including some of the biggest names on the High Street.
Fine & Country, Hunters, Northwood and Belvoir are amongst the company names cited on the Say No To Rightmove website as being signatories: however, the website makes clear these were opposed to the deferred payment plan initially put forward by the portal.
On Friday that plan was pulled and instead a much more appealing 75 per cent reduction was announced for the near future – bringing some support for the measure from critics of Rightmove.
The question for the number one portal is whether critics will continue with their threat of de-listing from Rightmove, seeing the current Coronavirus crisis as an opportunity for the wider industry to reset its marketing priorities.
Meanwhile Zoopla’s more complicated ‘two options’ offer to agents has drawn criticism because of what some see as its opportunistic nature.
The portal is to be free of charge for agents with fewer than 30 branches, which it says comprises 80 per cent of its client base.
This free period will be nine months if an agent leaves Rightmove, and up to five months for free if the agent does not. Both options then require agents to sign to an 18-month contract with Zoopla after the free listing ends, and the portal’s normal fees resume.
On Property Industry Eye one critic wrote of the Zoopla offer: “Is this really the time to use the virus for your own benefit? For me, the Zoopla offer is tasteless – why can’t they just make it free or reduced with no caveats? Maybe they are RM in disguise”.
On Twitter the digital consultancy Propportunities tweeted: “Zoopla’s supporting Zoopla! Is their response to crisis just a misleading opportunistic offer to prise agents off RM and on to long-term contracts?”
And property commentator, agent and PR company chief Russell Quirk tweeted: “Crass from Zoopla. PR rule number one – don’t try to capitalise on a crisis, at least not publicly.”
Industry analyst Anthony Codling summed up the situation by saying on social media: “You couldn’t make this up – Zoopla now offering agents nine months free if they leave Rightmove – as if times weren’t interesting enough. Who will be the first portal to pay estate agents to list?”
The three leading portals have rejected an appeal to give the industry a payment holiday to help firms through the Coronavirus crisis.
Estate Agent Today was approached yesterday morning by three independent agents exasperated about the prospect of sharply reduced revenue as a result of Coronavirus, which may well stretch over several months.
Ami Dixon, chief executive of online agency iMoveHome, contacted EAT on behalf of her firm and the High Street agency James Du Pavey – based in Nantwich and Eccleshall – and the Staffordshire High Street agency Dourish and Day.
Dixon told EAT: “As agents, we have had the most incredibly difficult 18 months, if we have survived Brexit, we are now to cope with Coronavirus. The market is suffering again and lenders are clamming up.
“The portals, being agents’ largest company bill, have done nothing to help agents keep going. Surely now is the time. Mortgage lenders are offering three months payment holiday to anyone affected, interest rates dropped, the government are taking the damage to our economy seriously but the portals again offer nothing.
“Isn’t it time the portals offered agents some ease and recognise they need to help too!
“If they do not react the only survivors will be the corporates – independents may not make it through another tough year of turmoil. James and Steve both run seriously good, award winning independent high street agencies, I am an online as you know – we are all going to suffer as the market spirals into decline.”
Yesterday morning EAT asked all three portals if they would consider a payment holiday, and we passed Ami’s note to them to show the strength of feeling.
However, the request for help has been been dismissed out of hand.
Rightmove told us last evening: “We’re working with industry experts to run webinars over the next couple of weeks with practical advice to help support agents. We’ll be announcing details of these webinars on the Rightmove hub. The first one is live at 3pm on Monday March 16 with Peter Knight on how to prepare for and make the most of working from home. We’re also sending information to agents to help them prepare if they do need to run their business from home for a temporary period of time.
“We’ll be closely monitoring the situation in the coming weeks and will add more relevant topics to help agents. We’re closely following government guidance at Rightmove and we have plans in place for all employees to work from home if necessary which have been tested to ensure they’re fit for purpose.”
Andy Marshall, chief commercial officer for Zoopla, told us: “Naturally we are mindful of the impact of Coronavirus on our agent partners. We welcome moves made by the government to help the industry, which include a business rates holiday and promises to refund sick pay costs for employees off work due to the illness. While it is too early to say for certain, we hope that the steps taken by the government, combined with the strong start the market has enjoyed this year and the recent reduction in the Base Rate, making borrowing cheaper, will mean the Coronavirus only has a short-term impact on the housing market.”
A spokesperson for OnTheMarket told us: “The situation regarding the COVID-19 virus is clearly evolving rapidly and we are monitoring developments accordingly. OnTheMarket recognised last year the challenging market conditions which agents were facing and decided the right thing to do was to support our agent base with our 2020 Pricing Pledge. This determined not to increase listing fees in 2020 for any agents on full standard tariff contracts who signed five-year agreements at IPO, rather than being charged an increase of up to five per cent as allowed for within the agreement.
“Following the election in December and at the beginning of this year, the UK housing market saw a marked increase in transactions and a ‘bounce’ in sentiment. While it is too early to tell the wider impacts of the COVID-19 virus on the housing market, we will naturally continue to monitor the situation very closely. In the current environment, and as the agent-backed portal, OnTheMarket is as committed as ever to delivering high volumes of quality leads and a first-class support service at a sustainably fair price.”
Just this week OnTheMarket – in the same announcement as it revealed chief executive Ian Springett had been sacked – boasted that its revenues for the year to the end of January were above the £18m figure it had previously suggested: it declined to comment on any pay-off being made to Springett.
Zoopla is not listed on the London Stock Exchange but its owner – Silver Lake Partners, a US private equity firm specialising in technology investments – bought the ZPG company for £2.2 billion in 2018, and has since then invested heavily in its agency services.
Rightmove’s growth rate is at an all-time low, despite what some consider to be an unbeatable lead amongst portals in the UK.
That’s the view of Mike DelPrete, former head of strategy at a New Zealand portal and a long-standing analyst of estate agencies in the UK and the US.
In a new analysis he says the primary driver for Rightmove – accounting for 72 per cent of its revenue – is its core agency listing service. “The growth rate of this business has dipped to four per cent, less than half of last year, and the lowest rate in years” says DelPrete.
He continues: “Rightmove has saturated the UK market. Every estate agent that could possibly be a customer, generally is. Therefore, the only way to increase revenues in the agency listing business is by raising prices.”
However, the analyst warns that Rightmove’s ability to raise prices is diminishing, and the key performance indicator for portals – average revenue per advertiser growth or ARPA – is falling annually.
DelPrete, an expert in US portals and agents as well as those in the UK, says the American site Zillow underwent a similar slowdown in its core lead generation business.
The analyst says the logical next move for such a business is to find new revenue streams, and in Zillow’s case it launched an iBuyer operation, home loans and other initiatives. “In the face of growth headwinds, Zillow acted decisively to diversify.”
However, he insists Rightmove has not done this – perhaps because it is in such a dominant position with a huge profit margin of 74 per cent on revenues and may be beyond the reach of other portals in the UK.
“But as a public company, it naturally faces pressure to grow — and that growth has steadily slowed over a number of years” says DelPrete.