Rightmove has dominated property marketing since the early noughties, and has never looked back.
It remains the leading portal in the UK in almost every way, including listing the most estate agent branches, generating the largest volumes of traffic and, more controversially for its customers, producing jaw-dropping profits.
But after nearly two decades of being all-conquering, has the portal finally become too big for its boots?
No one would contest its power. For years it has been the major source of leads for most agents and has been a ‘must have’ for any business serious about being a player in their local market; vendors and landlords have come to expect agents to list with Rightmove and are worried if they don’t.
Rightmove’s only weak point is the almost relentless increases in its fees, which have risen every year since it began and recently hit an average of £1,000 a month per branch, its annual results crowed.
Dealmakerz has talked to a spread of agents who were prepared to go on the record and bite the hand that feeds them their leads, from large corporates down to small independents, several of whom claim to have been told that their fees are to increase by over 20% this year.
Almost all were incredulous at the increase and said that ‘enough is enough’. During a time when the portal is making record profits, but the industry is experiencing severe headwinds, most wondered if the leaders at Rightmove’s head office in Milton Keynes have become detached from reality.
For many smaller businesses, these increases mean their monthly Rightmove bills are one of their key costs on a par with business rates and rent, and often costing as much as a member of staff.
Because of these rises, which have been funneling through in recent months as agents’ contracts come up for renewal, talk of the ‘straw that will break the camel’s back’ has begun and many agents are being persuaded to ‘try their luck’ without the UK’s No.1 portal.
One of the most high profile agents to break ranks is London multi-branch chain Kinleigh Folkard and Hayward (KFH) which has until recently listed only with Rightmove and OnTheMarket (OTM).
It has listed some of its central London branches with Zoopla and is running a comparative lead-generation performance study between the three portals.
This kind of experiment is common within the industry and are usually conducted behind closed doors, so to announce it publicly reveals an unusual level of frustration with Rightmove.
“We’re doing it to see whether we can move from Rightmove next year when our contract comes up for renewal,” says Paul Masters, Group Operations Director at KFH. “We track leads coming in every week and our prime metric is volume but we can track them through to completion.
“Looking at where our leads come from, OnTheMarket is building [momentum] and they are without a doubt taking market share from Rightmove.
“We do hear a lot of grumbling about Rightmove within the industry and there is a building sense among agents that its fee train does not seem to be stopping, but I just don’t know how this will play out.”Paul Masters, KFH
As Masters alludes to, what makes the latest industry mutterings about Rightmove more significant than usual is that rival OTM, the ‘third’ portal in this game, is gaining ground.
Research by investment analyst Zeus Capital recently revealed that OTM now has a million people signed up for its property alerts compared to Rightmove’s two million, and Zeus expects OTM to sign up 17,200 branches by 2021/22.
“OTM was conceived as a disruptive entity, which it still is of course, but it’s always had a theoretical worth more than a practical one,” says Trevor Abrahamson of Glentree Estates, one of OTM’s founding fathers, although he’s no longer directly involved.
“Until now you couldn’t stick with OTM on its own without listing on one of the others, but since it floated on the stock market 14 months or so ago, in many parts of the UK it is now a rival to Zoopla and Rightmove too, although there are still gaps.
“Rightmove has become so big it can’t get out of its own way and I believe OTM is playing a role in challenging its omnipresence.”
Abrahamson says his experience is that Rightmove’s arrogance in the face of such unprecedented competition is beginning to soften.
One agent who disagrees with this is London boutique estate agency owner Kristjan Byfield, who says he is facing a fee hike of nearly 23% this year for his business, Base Property.
He claims that his business is considering the option of quitting Rightmove next year and that animosity among agents towards the portal is unprecedented in his lifetime.
“Every agent I know say they’re facing very aggressive price increases this year and that Rightmove won’t negotiate at all and just says that if you don’t like it you can leave,” he says.
“This is frustrating for us because Zoopla drives up to 65% of the deals we generate from all our leads, so how can Rightmove justify their price hike when for us Zoopla is 40% cheaper than they are?
“I spent an hour on the phone with my Rightmove account manager last weak trying to see if we could find middle ground but she wouldn’t budge an inch, which is disappointing when you’re paying £2,000 a month.”
Kane Astin, who is Managing Director of seven-branch letting agency and estate management company Saint Andrews Bureau (SaB) and who employs 37 staff, says he’s got a meeting lined up next week with his Rightmove account manager that he says ‘should be interesting’.
Astin says his fees went up by an ‘astronomical’ 15% last year and that although he was initially sceptical about OTM, he recently signed up to its service.
“The tenant leads have been very good so far and therefore leaving Rightmove is something that we might consider,” he says.
“We get about 600 leads a month from Rightmove and about 400 from OTM so I think one strategy would be to turn off Rightmove for a month and see if we lose any business.
“Rightmove is a very strong platform and they’re very good at what they do but in my area in and around Cambridge there are several companies who are going through the same thought process as I am.
“The tenant fees ban is about to come in and we’re going to have to cut costs consequently, and Rightmove is a big cost.”
Speaking to the agents including these ones and those who would only talk off the record, it’s clear that a watershed of some kind is approaching as sales and letting agents face rising costs and begin to take a keener interest in which ones they may reduce in order to survive.