In January a new web portal launches. It’s previously been known as Agents Mutual and will trade as OnTheMarket.com.
On the face of it, an additional player in the uncrowded portal space is a great thing for agents and the consumer. Because more competition means a downward pressure on the costs charged to estate agents which could then result in lower estate agency fees. The agent wins. The UK home seller wins. And this is how things generally play out in free markets.
Except that the cartel of industry stalwarts behind the OnTheMarket website don’t seem to believe in free markets.
It’s pretty much the case that almost all UK home buyers visit Rightmove and/or Zoopla (and Prime Location, its stablemate) to search for property and to research their proposed move. Because of their dominance, both portals have increased their subscriptions prices to their agency customers in most of the last few years. Accordingly, several traditional estate agency firms such as Spicerhaart; Douglas & Gordon; Winkworth and Carter Jonas have go together with the industry’s hoi poloi (Savills, Knight Frank, Chesterton Humberts etc) to form their own version of the popular destination sites.
Their aim, they say, is to benefit the consumer.
Interestingly, OnTheMarket has set its agent fees at a figure very close to Zoopla and Rightmove. And has signed up just 20% of the UK estate agency network. It’s caveat to member agents though, surprisingly, is that to join the ‘breakaway’ rebels, participating firms must drop either Rightmove or Zoopla. Because OnTheMarket clearly wants to become one part of the duopoly that it so despises.
Is this free competition? Is it even legal?
Besides these big questions, potential property sellers should beware… It’s clear that Zoopla and Rightmove are dominant. That’s as a consequence of the 10million or so buyers that visit them each month. Yet the irony is that an agent that jumps to the good ship OnTheMarket, will thus HALVE the coverage that they provide to their selling clients. And if you as a vendor have signed up to a sole agency agreement on the basis of that agent’s promises of their marketing prowess, you may find that you’re about to be shortchanged significantly.
Chief Executive, Ian Springett, has also declared that better value online estate agents are not permitted to list their properties on his site. Again, a big legal question here (more on that soon) but the compelling standout here, surely, is that this shows the true colours of OnTheMarket. It is seeking to protect high estate agency fees so that it’s members’ rich margins are not harmed by the likes of emoov.co.uk which has proven that great service and high performance don’t have to come at a high cost.
The OnTheMarket concept is therefore entirely flawed. My view is that this is no more than a hissy fit by the estate agency establishment. A tantrum against the established portals whom, despite having ably assisted these founder agents in growing their businesses, the consortium behind the new site have in effect declared war on.
What the likes of Savills, Spicers, Winkworths and Co. etc seem to have overlooked is this: A portal and an agent need two things to be ultimately successful… inventory and buyer traffic (and they both rely on each other to succeed). The new pretender will have some inventory. But with a limp £6m marketing budget, buyers will never hear of them. Consequently, sellers will receive less interest in their homes and will complain to their agents. Those agents that jettisoned Rightmove or Zoopla will soon flock back to them and (here’s the irony) make the duopoly even stronger, the unintended consequence of this flawed effort to ‘teach the big two a lesson’.
OnTheMarket.com is such an apt name. Because when it has to sell up and to find a buyer itself, the name will be entirely synonymous with it’s own failure.
The full list of agents signed up with OnTheMarket.com is as follows:
Savills, Knight Frank, Chesterton Humberts, Strutt and Parker, Douglas & Gordon and Glentree Estates, and they have been joined by large brands including Kinleigh Folkard & Hayward, Thamesview Group, Winkworth, Jackson-Stops & Staff and Carter Jonas.
Strong backing has been gathered from London firms including Acorn Group, Featherstone Leigh, Bective Leslie Marsh, Stirling Ackroyd, Statons, Re/Max and James Anderson.