The number of full property details viewed on Rightmove – a key indicator of market health – is already stronger than a year ago.
The portal says this measure indicates serious buyers looking at pictures, descriptions, videos and floorplans; the figure has recovered from a 35 per cent drop as the housing market closed to now being up two per cent on this time last year.
Separately a survey by Rightmove during lockdown found that 94 per cent of first-time buyers were determined to continue with their plans to get on the housing ladder when they were allowed to do so.
This new analysis, based on properties that typically appeal to first-time buyers – those with two bedrooms or fewer – shows the additional amounts first-time buyers may need to save up for or hope to borrow from family, if they need a 15 per cent deposit to comfortably afford the mortgage repayments.
The study of 20 cities in England reveals an average difference of over £12,000 between a 10 per cent and 15 per cent first-time buyer deposit based on the current average asking price of £241,891.
There is a difference of over £58,000 between the biggest and smallest 15 per cent deposits required in cities in England, with the biggest needed in London and the smallest needed in Bradford.
Despite the seven week pause in the market, asking prices of all typical first-timer buyer property currently listed have generally held up, and are two per cent higher in England than this time last year in this sector.
There is currently £60 billion worth of property in this first-time buyer sector on Rightmove, including those that currently have a sale agreed and now hope to continue through the conveyancing process to completion.
In five out of the 20 cities asking prices are slightly cheaper than in 2019.
“Many first-time buyers looking to grab a bargain right now may find they’re disappointed, as on the whole asking prices of all first-time buyer properties up for sale have been holding up. There will of course be some sellers who need to sell quickly and may be willing to negotiate on price so it’s worth asking your local agent if there’s any with this predicament if you do now need to lower your budget. However, where demand is outstripping supply and it’s an attractive property in a desirable location then an offer closer to the asking price will have a better chance of being accepted” says Rightmove’s commercial director and housing market analyst Miles Shipside.
“If a property is over-priced it’s usually pretty obvious by looking at similar properties up for sale on Rightmove in the same area, or by using sold prices to find out how much properties nearby sold for recently, so this should help prospective buyers feel more confident that they know how much they should be offering” he continues.
“If lenders are able to offer more attractive lower deposit mortgages it would help sustain the recovery in activity. If it can be done responsibly, with strict affordability criteria, then a return to more mortgage offers of 90 per cent loan-to-value, or even 95 per cent could make a huge difference to someone having enough money now for a deposit or having to save up for another few years. First-time-buyers will be keeping a close eye on how lenders deals unfold.”
Homesearch – the new property portal which describes itself as “the future of the property industry” – has delayed its launch.
It was scheduled to go live on May 25; just days ago it reported to Estate Agent Today that it had recruited 14 new staff.
However chief executive Giles Ellwood is now reported to have told a webinar: “We wanted to achieve something radical in two months. Unfortunately it’s going to take us three. Pushing the public release back by four to five weeks will allow us more time to properly onboard agents, more time to integrate further with CRM providers and more time to test.”
The new launch date is reported to be July 1.
Towards the end of last year Homesearch launched a ‘live market’ features to its property data service, which it was running ahead of the portal starting. That feature, too, was delayed in its arrival.
In the past Homesearch has said it invested over £3m in the service and has called itself a truly agent-first platform.
It has said it aims to be: “A network where consumers can interact with your agency and your instructions, as well as placing your agency in front of them for every other property they search for in your market. Everything will lead back to your website and the phone numbers and links will be yours, not ours.”
Homesearch says around 6,000 branches have registered an interest in its services – it says this is some 32 per cent of the industry.
On May 10 the service stated on its website: “Just six weeks since we announced the plans and started documenting our progress, some 5,600+ branches have become part of the movement. Your contribution to our webinars, emails and messages of support keep us energised and working hard.
“What has become clear from the new conversations we’ve had since we announced the Network, is that the industry does want change. In most cases, and for most agents, their current portal and prospecting costs are a burden to growth and long-term success.
“This letter is a call to action to join the 32 per cent of the industry who have already shown their support.”
There’s been a very significant increase in the number of listings carrying virtual viewings, accelerating during the period of the Coronavirus crisis and lockdown.
An analysis of Rightmove listings conducted by virtual tour provider Made Snappy shows that the pandemic has expedited agents’ uptake of visual aids in portal listings.
Between mid-November 2019 and mid-May 2020 the number of lettings adverts on Rightmove with virtual tours increased by 179 per cent. Meanwhile, the number of lettings listings with videos increased by 280 per cent during the same period.
Between mid-April (when lockdown measures were at their most severe) and mid-May (when market activity started to resume) the number of lettings listings with virtual tours increased by 44 per cent, rising by 63 per cent when it comes to listings with videos.
On the sales side, the number of property listings on Rightmove with virtual tours increased by 77 per cent between mid-November and mid-May, while the number of adverts with videos increased by 50 per cent over this six-month period.
Over the past four weeks the number of sales adverts with virtual tours has increased by 19 per cent alongside those with videos increasing by 26 per cent.
“The lockdown has understandably forced more agents to embrace virtual tours, particularly on the lettings side. Our analysis also reflects the quicker restart of the lettings market compared to sales, which will be much slower to get started” says Mark McCorrie, software director at Made Snappy.
“With the market now up and running, we expect the number of portal listings with virtual tours to increase even further as more agents will be operating at full capacity over the coming weeks.”
The government, in its official guidance on the resumption of the housing market, says: “We encourage people to do the majority of their property searching online … To support this agents may ask home occupiers to conduct virtual viewings.”
And in relation to new-build property sales it advises: “Where possible, developers should promote virtual viewings.”
Made Snappy says it anticipates a 75 per cent reduction in physical lettings viewings while social distance measures remain in place.
“We know of letting agents who have used virtual tours to filter down applicants, subsequently achieving a 100 per cent success rate on the physical viewings – we expect this trend to become the norm” says McCorrie.
Rightmove says it’s to launch its biggest ever national marketing campaign in a bid to kick-start the market once lockdown eases.
The news comes in a 10-point plan from the portal, sent to all of its agent members this morning.
No comment is made in the plan about future fees but commercial director Miles Shipside says: “We recognise that agents will have a difficult period after existing pipelines complete. While we’re only five weeks into our four-month 75 per cent discount, we’re closely monitoring the situation as we’re profoundly aware that our customers’ revenue growth is critical to the way we all move forward in these uncertain times … We’d like to thank all of you that have been speaking to us about your hopes and fears for the market and how we as Rightmove can help you prepare for the future.”
Rightmove says each of the 10 points will be developed further with agents in the coming weeks.
The 10 points are:
– Special Relaunch Email Alerts to over two million home-hunters who have active alerts set up;
– A video strategy to promote leads and make “cost-saving efficiencies in order to cut the number of unsuccessful physical viewings”;
– Re-assuring home movers that viewing is safe – the portal says it’s “working with government to use Rightmove’s unparalleled reach to educate buyers, sellers, and tenants to feel confident”;
– Sharing early local sales demand indicators with agents;
– Faster qualification of tenant leads;
– Detailed analysis of the source of leads that result in a sale or a let;
– An “introductory rate” with external suppliers Moneypenny and Viewber;
– Training for the new normal and social distancing through webinars;
– Biggest ever national marketing campaign “using the strength of our brand and investing in our biggest ever national advertising campaign”;
– And a new property details page which will offer more focus on agents’ brands, photos and video content.
Shipside tells agents: “We’ll play our part in helping you to get the market in your area moving again, and to do that more innovatively and efficiently. More detail on these actions will be published with time for you to take full advantage of them. Many of these actions are inspired by your comments to us, so please keep making suggestions on what will help you most.”
The Say No To Rightmove campaign, which expects to have some 3,000 offices signed up by the end of the month, has been accused of lacking long-term vision.
And the agent behind the campaign – Rob Sargent, chief executive of the Acorn agency group operating in London and parts of the south east – has been told that he should “impartially set realistic expectations and thoroughly examine all alternatives to the current status quo.”
The comments come from Andrew Goldthorpe, chief executive of the Property Mutual portal, in a lengthy contribution to the portals debate on LinkedIn.
He says it is encouraging to see agents finally taking collective action through the SNTR campaign against “the ever-increasing fees of Rightmove” but he says he’s surprised that “the strategy appears to revolve around short-term objectives based on corporate fee reductions and lacks a long-term vision for the industry.”
Goldthorpe is particularly sceptical of what he sees as the campaign’s promotion of OnTheMarket as a possible alternative option for agents disenchanted with Rightmove, asking: “What possible benefit is to be gained by giving additional control to another [stock market] AIM listed corporation in the form of Onthemarket PLC?”
Goldthorpe congratulates Sargent for becoming the figurehead of long overdue collective action by agents, but then adds: “As a founding member and shareholder of Onthemarket PLC, I believe it is incumbent upon him to impartially set realistic expectations and thoroughly examine all alternatives to the current status quo.”
The Property Mutual boss says neither Rightmove nor OTM is under any obligation to consider themselves “the agent’s friend” and warns that PLC boards are not obliged to acquiesce to the demands of agents.
“Agents sold that right, like turkeys voting for Christmas, when they voted to sell ownership of these businesses to the public and institutional investors. The primary purpose of both PLCs is to increase revenue, dividends, and market capitalisation, year on year, for their investors. The fact this process happens to be at the expense of estate and letting agents is irrelevant and unfortunately a situation of agents’ own making. PLCs are not the agents’ friend, at any price” he adds.
Instead Goldthorpe calls for what he describes as “a hybrid mutual/commercial partnership between two companies, whereby the mutual Ltd (‘the Mutual’) is limited by guarantee and the commercial service provider (‘CSP’) is limited by shares.”
Under this system, mutual members – agents – pay “an affordable subscription fee” and the mutual is legally structured to be never for sale, with a charitable assignment clause.
The mutual pays the CSP a service charge to develop, manage, support and market the portal over a minimum term contract period of five years, and commits to spending 50 per cent of its revenue on marketing the portal.
Profits are shared and “could either be filtered down to agents or reinvested into the portal based on a mutual vote.”
Goldthorpe says such a structure is transparent, independent, and puts agents back in control and says his Property Mutual platform “already provides a fully functional property search platform for residential, commercial, agricultural and overseas properties whilst providing basic lead generation for estate agents.”
And he concludes his LinkedIn piece saying; “In its current form it provides a solid foundation to start mutually shaping and building the next-generation property platform in co-ordination with UK agents.”
Investment bank RBC Capital has downgraded its rating of Rightmove and is warning that the property market is entering a prolonged downturn with agency closures on the horizon.
The bank has cut Rightmove’s share price target from 550p to 440p.
In an advice note to investors it warns: “The likelihood of an immediate, sharp impact on the property market from Covid-19 extending into a drawn-out period of weakness has increased, in our view. As such, we expect an acceleration in estate agent closures and greater pressure on Rightmove’s Average Revenue Per Agent [ARPA, a key measure] near term.”
It goes on to say: “Rightmove’s pricing power may be undermined by a downturn. Rightmove’s ARPA has increased almost four-fold in the last 10 years and now represents circa five per cent of an agent’s revenue …
“We are concerned that this degree of price rises many not be sustained going forward, particularly in light of negative press coverage Rightmove continues to receive from disgruntled agents and more aggressive competition from number two player Zoopla.”
In its most stark warning to the industry as a whole and the leading portal in particular, the bank continues: “The Covid-19 crisis may act as a catalyst forcing agents out of business and undermining Rightmove’s ability to resume annual seven to 10 per cent prices rises in the future.”
This compares to a 13 per cent fall during the credit crunch over a decade ago.
Two agents have quit Rightmove and taken to social media to give their reasons.
One is the 12-branch Andrew Craig agency which serves Tyneside, Wearside and County Durham handling sales, lettings, auctions, property management, conveyancing, surveying and mortgages.
In a tweet posted by OnTheMarket the agency – which has quit Zoopla as well as Rightmove – says: “I have cancelled my contracts with both Rightmove and Zoopla to fully support OnTheMarket because we think it’s the best value portal by far and because it’s agent-backed.”
And another OnTheMarket tweet quotes Simon Fisher of the three-branch Absolute Sales & Lettings agency in Torbay as saying: “We cancelled our contract with Rightmove just before their offer of a deferred payment scheme. We decided they hadn’t looked after agents and had become too far removed from what they set out to do.”
The OnTheMarket website says: “More and more agents are saying that OnTheMarket is generating a good flow of quality leads at a reasonable cost. As agents review their portal choices, many have cancelled other higher cost portal contracts and many are signing up to list with OnTheMarket.”
The most recent update on OTM’s members came from the portal in Christmas week last year, at which point it said it had “over 12,500 agent offices” – there has been no more recent update.
The latest defections come as the Say No To Rightmove campaign, set up by Robert Sargent, chief executive of the Acorn Group, has reached some 1,100 branch members.
Sargent’s company has 36 branches across London and the south east and spends close to £500,000 on fees to the portal.
The portal debate has become increasingly heated since the start of the Coronavirus lockdown with disputes over the varying offers made to agents by Rightmove, Zoopla and OTM and challenges by newer portals such as free-to-list Residential People and yet-to-launch sites called OpenBrix and Homesearch.
Some 2,500 estate agency branches have expressed an interest in a new portal, Homesearch, launching next month.
Although the Homesearch website lists the branches as having “joined” the new portal, a statement from the two founders refers to the branches as having “signed up to register their interest and follow the development of the new product.”
Homesearch says it has information on Britain’s entire 29m housing stock and pledges to be not just another portal but “the future of the industry” when it debuts on May 25.
The statement also says that while the portal will not directly charge agents for listings or leads, it will offer an optional – and so far unexplained – service called Network which will cost £155 per bench per month, capped until 2025.
Homesearch has been a supplier to the industry since 2017, until now specialising in data for agents.
Co-founder Giles Ellwood, who is the owner of Homesearch, says: “Homesearch is not a portal in the traditional sense. We won’t charge to list instructions, nor will we ever charge to deliver leads. As we approach the launch we will detail exactly how the Network piece will serve agents to deliver buyers, sellers, landlords and tenants from day one.”
And the other co-founder, Sam Hunter, adds: “Homesearch will always be about giving an agent the information and technology needed to connect with more people. Now we’re just giving the public an opportunity to connect back.”
Agencies registering an interest so far include those from Foxtons, Winkworth and Purplebricks, although the majority appear to be small independents.
The website say that from 2025 the Network cost will be £395 and will rise thereafter in line with the Consumer Price Index “which is circa 1% to 2% per annum.”
It also adds: “We’d be open to discussing how members of the agent community could participate in our board meetings as an added layer of transparency.”
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.