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Coronavirus crisis and the portals’ response to the plight of agents

As the Coronavirus spreads across the UK, our estate agencies face a battle to keep afloat – this is how the portals have responded to the developing crisis in the industry.

The Negotiator

Link to Coronavirus Crisis

 

Link to Coronavirus CrisisOne of the first symptoms of another battle brewing between estate agents and the masters of the property portals came when Murray Lee of Golders Green agency, Dreamview Estates. Murray, who has been in the business for 50 years, told The Negotiator that he and other local agents formed the group after failing to gain much sympathy from their local Rightmove rep.

This news propelled agents across the UK to action, with an avalanche of emails, phone calls and online comments, as the portals realised that they had a fight on their hands.

When Zoopla and OnTheMarket joined the battle, it became fierce, with online interaction across the portal map.

Within two days 80 other agencies, with 150 branches joined Murray to ask for more help than Rightmove had offered within its ‘deferred payments scheme’, in which Rightmove would reduce its fees by between £150 and £500 a month for qualifying agents, depending on size and sector, to help agent cashflow during the Coronavirus crisis.

When agents responded with an avalanche of emails, phone calls and online comments, the portals realised that they had a fight on their hands.

However, the Rightmove scheme would not start until May 1st and the fees ‘reduction’ offered was, in reality, a deferred payment scheme; in which estate agents would have to pay the money back over an agreed term of between three and six months after the Coronavirus epidemic is over.

The scheme would also only apply to estate agents who have fewer than 25 branches and who have been with the portal for at least 12 months.

Rightmove also offered a series of webinars with industry experts on subjects from working at home through to legislation in the current environment and managing mental health.

Fever rises

By Thursday 19th March, the lobbying group had over 250 estate agencies onboard, sent another email to Rightmove. One of them, Robert Sargent, CEO, Acorn, said, “For years I’ve been very vocal about Rightmove’s attitude to the hands that feed it, but their tone-deaf response to the Covid-19 pandemic compelled me to shout louder,” he told the members.

“Like you, no doubt, I’m concerned for the future of my business, and Rightmove is one of our primary monthly expenses after staff. “While portals do serve a purpose, I have always maintained that they aren’t as essential as they seem to think they are. It’s people who sell properties, not portals.”

Sargent also invite all agents to join his separate Say No To Rightmove campaign which, he says, already has 150 members from the industry.

OUTCOMES

Zoopla wins!

Link to Coronavirus Crisis

Agents working with Zoopla have been offered three or nine months of Zoopla usage free of charge.

The portal smashed the current portal battle with its announcement of two new industry-leading fee structures which will support estate agents and to help mitigate the financial impact of coronavirus on agent businesses over the coming months.

The offer is available to new and existing estate agency customers of 30 branches or less (which covers over 80 per cent of the UK estate agency population), as well as overseas and commercial agents, each option has been specially designed with the needs of agents in mind, offering both flexibility and financial backing to those requiring support.

The two fee structures:

ZOOPLA OPTION 1:
Nine months of Zoopla – free

Zoopla offers nine months of portal usage entirely free, returning to normal fee levels thereafter, as part of an 18-month contract that follows the free term.

This is designed to support agents who recognise the benefits of establishing a long-term partnership with Zoopla, and who make a commitment to leave Rightmove once their current contract comes to an end.

ZOOPLA OPTION 2:

Three (to five) months of Zoopla free

With this option, Zoopla offers three months of portal usage entirely free, returning to normal fee levels thereafter, as part of an 18 month contract that follows the free term. There is scope for the three month free term to be extended by a further two months, depending on whether the government limitations to control coronavirus have been lifted.

After the free period, agents will return to normal fee levels.

For both agreements, price increases will not exceed the RPI for the duration of the contract. Agents are able to sign up to either deal up until the end of April 2020, with the new terms to take effect from 1st May 2020.

Link to Coronavirus special reportCharlie Bryant, CEO, Zoopla, said, “We have consistently said that agents are at the heart of everything we do, and today’s actions demonstrate the role we can play in helping to secure the long-term success of our agent partners. It’s our aim to support and work alongside agents to unlock new opportunities, deliver the utmost value for money, and to bolster them during this difficult period. “This isn’t something we wanted to rush; we have taken the time to speak to our customers to get these options right for them. We know each agent is different, which is why we have two compelling offers available. Both options are simple, concise, and there are no hidden clauses. Available to new and existing customers, we hope that they provide a financial cushion for agents that alleviates pain points and meets their respective needs.

“Following the raft of investments made across the business, in product and technology, customer success, and in recruiting a highly skilled workforce, we are confident that Zoopla is the best marketing solution for agents. Without doubt, now is the time for agents to make Zoopla their primary portal. We look forward to working with the industry throughout this challenging time, and to playing a key role in helping our agent partners to grow in the months and years ahead.”

Rightmove offers 75% refund

Link to Coronavirus Crisis special reportOn Friday 20th March, Rightmove made a complete U-turn on its ridiculed deferred payments scheme and announced that it will refund all its customers invoices by 75% for the next four months – the first time it has reduced its fees since being established in 2000.

The dramatic announcement was revealed to the stock market on Friday , and Rightmove said it had come to the decision after listening to its customers, and witnessing a significant slowdown in the speed of the UK housing market.

“Notably the number of property transactions failing to complete in recent days and likely changes in tenant behaviour following the announcement of the renters’ protections by the government may put further pressure on estate and lettings agents,” the company says.

Link to Coronavirus Crisis special reportIt is understood that its CEO Peter Brooks-Johnson has been speaking on the phone to many leading estate agents over the past two days, and been ‘given an ear bashing’.

The 75% reduction in fees will run from April until July will be for all its customers including agency, new homes and commercial property customers.

Rightmove says this will decrease its revenues this year by up to £75 million. “At Rightmove we are doing everything in our power to rise to the challenges of COVID-19. We have chosen to utilise our position to support our customers at this difficult time,” says Brooks-Johnson.

OnTheMarket cuts fees by a third

Link to Coronavirus Crisis special reportOnTheMarket has dropped its fees by a third for three months without any strings for customers currently on its full tariff.

The portal sent an email out to its customers pledging its support for agents in this difficult time, but not revealing a price reduction programme, had a change of heart.

Calling it a payment support initiative, unlike its rival Rightmove which has caused widespread protest among agents with its ‘deferred payments’ system, OnTheMarket is simply reducing its fees for invoices issued in the three months starting in April.

“We hope that this will go some way towards easing the pressure which agents of all sizes, in both sales and lettings, are anticipating in the coming months against the unprecedented COVID-19 backdrop,” says Clive Beattie, Acting Chief Executive Officer.

“OnTheMarket exists because agents had the foresight to want their own portal in order to control their online marketing cost base. It is the core strategy of OnTheMarket as the agent-backed portal to deliver value and to provide first-class support for our agent customers.

“We are resolutely focused on doing everything possible to deliver value to our customers, both in these circumstances and beyond. We are the agents’ portal. We understand the next few months are going to be tough and, as such, we believe simply kicking the monthly rate back is not helping agent partners, it’s delaying the unavoidable. We believe that offering this discount early will assist agents to control their costs in the face of such uncertain times.”

INDUSTRY COMMENTS FROM THENEGOTIATOR.CO.UK

Andrew Stanton,
Proptech Real Estate Strategist

Dissent and upset, and anger is now being focused on Rightmove, yes all shares are getting hit, but Countrywide, and now Rightmove are showing they are out of step with the very industry they are in – you cannot fool all of the people all of the time – and if there is a mass exodus from Rightmove, those in the c-suite maybe deserve to be reminded who pays their salaries and bonuses.

Pam Batth,
nu move

“RM 75% off for 4 months, OTM 33% off, Zoopla free if you ditch RM for 9 months, Choices, Choices, Choices Hmmm, they need to smell the coffee and take notice from Scientific Advisory Group for Emergencies just released now, it can take a year before we see results. I suggest the three major portals should do for free for a year. No ifs, no buts.”

Steve Way,
Oxlets

Count me in Zoopla – I’ve been looking for a good reason to kick Rightmove into touch, even though they’ve countered with a reduced fee. Rightmove have for too long bashed us agents for high rates and now’s the time to tell them enough is enough and walk away.

I’m with OnTheMarket too and to be honest, the leads from both Zoopla and OTM combined have been steadily increasing to the point where I don’t think I actually need Rightmove anymore.

Ken Houchin,
Roland James

Could the original offer from Rightmove prove to be their ‘Ratner moment’ and that by insulting their customers so badly the adverse reaction brings them down. To paraphrase “How can we charge so much? Because we think our customers are c***p.” If you don’t remember Gerald Ratner, try Google.

Friendly local agency

They haven’t done this out of the kindness of their heart as they would have you believe – they have no heart!

The hundreds of membership cancellations they have received over the last couple of days have backed them into a corner and forced them to change track.

I just hope that those agents that have given notice aren’t fobbed off by this, and remember that this is a mere publicity stunt and that Rightmove’s plan on charging ever increasing fees has merely been put on hold.

April 1, 2020

6 comments

  1. Zoopla should be more clear on the “three (to five) months”. We have asked them to confirm whether it is going to be 5 but still awaiting an answer from them.
    Our contract terminate in June. Don’t you think it is better to wait until then and get a better deal?
    What’s your opinion about that?

    Best,
    Matteo

  2. Great report Nigel (only 48 years this month..dont over age me!)

    Can I point out to Mr Bryant Zooplas offer comes with conditions

    https://advantage.zpg.co.uk/zoopla-plans/?utm_source=propertyindustryeye&utm_medium=trade-email&utm_campaign=zoopla-plans

    Option 1: 3-5 months free + 12 month contract

    Option 2: 3-5 months free + 13-36 month contract

    As my colleague agent replied to the local rep “these are no options”
    As agents we cant commit to a new contract of any length at this stage
    Some may not even know if they will have a business to return to

    Turn again Dick Whittington as the story goes

    Yes, free please Mr Bryant….but too review in 4 months

    Listen to the voices of the business that supports you
    #togetherwearestronger

  3. For perhaps the first time in 20 years, agents at least FEEL like they have an opportunity to make a decision around what portals they need to involve themselves with moving forward. If nothing else, this is good news for agents and the consumer. We made the decision to build a public service into Homesearch because of the additional information we will be able to provide both Agents and Consumers. If we can improve the experience around ‘property’ as a whole and deliver the public more of what they clearly need and agents not just higher quality leads, but genuine buyers, sellers, renters and investors, it’s the best thing for all parties.

    53 days, 9 hours and 3 minutes to go (at the time of writing).

    Keep up the good work, Nigel.

  4. The present crisis and lock down is making all agents look at their fixed cost model, and start to think what adds value and what is an expensive millstone around their neck.

    Yes agents need to sell and rent stock, but increasingly property portals are seen just as the departure lounge for property, not a way of finding vendors and landlords, the lifeblood of the businesses.

    Many are now pouring some of their budget into social media, realising that local engagement with their customers pays as big rewards as being on a pretty faceless and brand averse digital property portal.

    My advice minimise your cost spend on property portals, even after these distressing times, and test drive services like Brightbee.co a simple, five click and very effective way to digitally expand your brand on social media and showcase your stock. A win win initiative, sometimes great tech can be simple to use and does not cost the earth.

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