DMZ investigates whether OnTheMarket (OTM) is being crushed to the point of extinction by the two portal bigwigs – RightMove and Zoopla.
Property portal OnTheMarket hasn’t had the easiest ride since its launch in January 2015 – multi-million pound lawsuits, counter claims and rebel agents rising up against them like a band of suited William Wallace’s in Braveheart.
Owned by Agents Mutual, OTM was created to gain market share from the two market leaders Rightmove and Zoopla by allowing agents to list homes on only one other major competitor. The now infamous “one other portal” rule was coupled with an exclusion of online only agents.
At first glance things do not look good for OTM.
An analysis of branches and listings from their website has revealed plunging listing figures, 60 branches have disappeared and 5,000 fewer properties were listed on October 18 than just a month before. The most pressing issue for OTM management is that they have already surpassed their peak after only 2 years in business, the absolute number of offices listing on the portal is now in decline.
To counter tough times, OTM have allegedly been discounting their pricing to £50 per month irrespective of size and volume of the branch office, which will surely do nothing but infuriate initial clients who may be paying a much higher premium for the service. Another ongoing problem for the company is the ‘OnTheMarket Action Group’ led by veteran agent Iain White.
These rebels have a number of grievances including being misled on their membership package and the removal of properties from the portal with no warning or valid reason.
Credit Suisse released a note in April this year on the impact of Action Group, “We see the formation of a group of agents with a common view as positive as it gives these agents a clear coherent voice and allows them to share any legal costs between them”.
Investment Bank Jefferies said “The Action Group may act as a catalyst for the relaxing of the ‘one other portal rule’, which, in our view is rather anti-competitive and not in consumers’ interest…it appears to us that OTM members are increasingly starting to believe it is not in their interests either.” BNP Paribas played down the impact of the Action Group to their clients, stating any legal action will take months if not years, limiting any quick change to the ‘one other portal’ rule. They also pointed to the “somewhat limited” commercial impact branches had after leaving Zoopla and moving to OTM.
OTM Chief Executive Ian Springett has retained a positive outlook, “OnTheMarket continues to gain in strength as a major portal. Inconvenient as it may be for our detractors, we are here to stay…there is now a challenger agent-owned portal in the market to list and view properties on.”
DMZ are all for healthy competition in the Real Estate market, its this competition that produces an efficient process and price for the customer. The word ‘challenger’ evokes disruptive and progressive business models such as Uber or AirBnb, two firms increasing transparency to create an improved end result for consumers.
By continuing with the ‘one other portal’ approach, OTM are attempting to manage out their competition whilst not really bringing anything new to the table – the portal experience is very similar to RightMove and excluding online agents removes choice and comparisons to would-be buyers.
DealMakerz would love to see a third portal to compete with Zoopla and RightMove, but we fear that the restrictions OnTheMarket slaps on both estate agents and buyers mean they will remain a fringe player in the Portal Wars for the foreseeable future.
How could OTM turn things around?
Remove the ‘one other agent’ rule
Include online agents on their portal
As allegedly one of the cheapest portals already, why not market yourself on price?
OnTheMarket are obviously keen DMZ‘ers as they contacted us the day after the article was published to ask if we could include a statement from them in response to #PortalKombat.
“As far as we understand, supporters of Mr. White’s ‘Action Group’ represent between 1% and 3% of our agents. The overwhelming majority of member agents remain wholly supportive of OnTheMarket.com and of our shared long-term commitment to build the best portal for consumers and agents alike.
Regarding the reference that some agents are considering legal action against OnTheMarket.com for alleged misrepresentations made in relation to pricing policy, we have no reason to believe that there are any grounds for legal action. It would be untenable to allow an agent to breach the ‘one other portal’ commitment it has signed up to.
At the end of October, the number of UK listing offices was 15% up year-on-year.”
So, make of that what you will. DMZ still aren’t convinced that the ‘best portal for consumers’ is one that effectively reduces their overall choice by decreasing listings across portals and excludes online agents, who are now reportedly 5% of the market.
Recover your password.
A password will be e-mailed to you.