- The success of U.K.’s dominant real estate vertical has drawn ire from agents concerned by its monopolistic position on the market.
Reposted with permission from AIM Group‘s most recent “Classified Intelligence Report.”
Rightmove has announced record traffic levels for its site, with visits in Jan. 2016 up almost 20 percent on the same month last year.
However, the success of U.K.’s dominant real estate vertical has drawn ire from agents concerned by its monopolistic position on the market.
The platform enjoyed more than 127 million visits and 1.7 billion pageviews last month. Rightmove has also stated that its market share of traffic among the U.K.’s real estate verticals was 82 percent for the year ending June 2015, up from 77 percent the year before.
Commenting on the results, Rightmove’s Director and Housing Market Analyst, Miles Shipside, was understandably pleased.
“These January statistics should give both sales and letting agents confidence that an active year with plenty of business opportunities lies ahead,” he said.
OnTheMarket’s failure to break monopoly unleashes industry fury
Rightmove might be celebrating, but its agents are very “unhappy” with the business.
Such public outcries have been largely muted since the launch of real estate vertical OnTheMarket in 2015.
OnTheMarket was formed with the sole mission of disrupting the Rightmove/Zoopla duopoly in the U.K.
Agents hoped a new competitor would put price pressure on the existing platforms. However, one year on and Rightmove has only strengthened its leadership position.
Agents claim the lack of public awareness about the new player gives agents little motivation to leave the market leader.
As a result, agents have turned to public forums to express their frustration, with one post in particular from an agent (who does not want to be named) proving very popular among fellow industry insiders:
“I believe Rightmove’s high pricing for agents indicates it is operating as a monopoly. I started an independent sales and lettings agency in the North West (England) eight months ago and had Zoopla, On the Market and Rightmove provide quotes to advertise through their portals. Zoopla and OTM quoted around the same, £330 a month to post properties for sale and to let.
“Rightmove quoted £1,600 a month for the same service that would ‘be discounted by 50 percent’ for six months. This was for covering just one postcode, in a non-city location in the North of the country where the average sales price is £125,000 and, due to intense competition for instructions, sales fees are in the region of £800.
“The six-month 50 percent discount was to help new businesses get started. ‘We like to support new businesses’, said my Rightmove account manager, the second in just two months.
“Having read that Rightmove was the platform with the most traffic I went with them and took up their 50 percent offer, incurring a fee of £790 per month. Therefore, I needed to sell one property a month to pay my Rightmove bill.
“Shocked by what seemed to be extraordinary fees I contacted other agents who shared their Rightmove fees. What I found was just as shocking — their pricing is all over the place:
- No two agents paid the same fees.
- An agency with eight staff, covering three postcodes, was paying around one-third of the value of my Rightmove invoice for the basic products.
- Agents had ‘discounts’ applied — they had no idea what they were for and had never paid the pre-discounted price — they seem a meaningless entry on the invoice.
- Some agents got multiple products totally free — others paid in full for them.
- Pricing ignores area/postcode or agency size — small agents in low-value areas paid more than large London agents with an average sales commission of £20,000 plus.
- Some agents complained at frequent Rightmove’s price increases.
“I discussed my findings with my account manager who said that the lower fees for the big agencies were because they had been with Rightmove for longer. She was not interested in my claims of discrimination against small Northern businesses.
“I feel trapped in a monopoly pricing situation.”
“I believe Rightmove’s high pricing for agents indicates it is operating as a monopoly.” — Post from unnamed real estate agent
UAgents hope collective bargaining will shift Rightmove’s stance on fees Rightmove reported its Average Revenue per Advertiser (ARPR) as being £740 per month in its H1 2015 financial statements for the period ending June 2015, up from £671 in H1 2014.
The quoted agent said he was confused as to why his invoice was more than double Rightmove’s published ARPA. He has lodged a complaint with the U.K.’s Competition and Markets Authority (CMA), the government body that deals with anti-competitive behavior.
Since the publication of the controversial post, other agents have rallied to propose a weekend boycott of listing properties on Rightmove. The date is yet to be set, but the strike will see agents turn off their feed to Rightmove from Friday evening to Monday morning.
Agents hope that collective bargaining might bring about a change in Rightmove’s prices.
AIM Group contacted Rightmove for comment but has received no response.
Lisa Walls-Hester is a senior analyst for Western Europe for AIM Group.