Can anything stop the juggernaut that is Rightmove, asks Investors Chronicle

Rightmove has been described in Investors Chronicle as “probably the most impressive business I have ever looked at in over 20 years as an analyst and financial journalist”.

Writing in the magazine, Phil Oakley says: “Its ability to grow while achieving incredibly high profit margins and cash generation with very little capital investment has delivered sensational returns for its investors.”

He says that Rightmove has achieved growth “while delivering probably the best financial performance of any company listed on the London Stock Exchange”.

The article, under the title ‘Can anything stop the Rightmove juggernaut?’ also asks: “So far, Rightmove has been able to fend off the competition and thrive, but can it continue to do so?”

The article says that leaving Rightmove may have significant negative implications for agents.

“Rightmove has created a brand and service that have become synonymous with estate agency itself.

“To leave and go elsewhere is a risk that few estate agents have been prepared to take . . . This has given Rightmove immense pricing power.”

But, he asks, can Rightmove keep on increasing its prices?

“Trawl the internet, estate agency forums and trade publications, and you will find that Rightmove and its pricing is a hot topic”, says the article.

Agents are facing tough times, there is disquiet over the opaqueness of its pricing, and then there is the issue of geographical pricing.

So, how effective is the competition to Rightmove?

Oakley says that given the huge discrepancy in price, it begs the question as to why more agents don’t use Zoopla instead of Rightmove: “This may happen in the future but it is not happening now.”

OnTheMarket has not inflicted any damage on Rightmove and “may never be in a position to do so”.

This, suggests Oakley is because customers currently on free trials may need convincing that it is as good as, or different from, Rightmove or Zoopla.

Oakley also queries the “strange” decisions of OTM and Zoopla to list their lettings properties on Facebook Marketplace, casting some doubt as to whether this will bring the kind of coverage and leads that will unnerve Rightmove.

Oakley also – very briefly – cites Rummage4Property, which he says shows belief “that a bite can be taken out of Rightmove’s profits”.

If a competitor cannot halt Rightmove, Oakley suggests that a property market recession could do it.

There has been a stagnation in the number of advertisers, Oakley points out.

He ends by advising investors: “If you believe that the company can continue to dominate the property portal market and keep on increasing prices without losing customers, then there’s a case for arguing that the shares are not desperately expensive.

“Those who think that its customers may have been squeezed enough in a weakening UK housing market will stay well clear of the shares.”

https://www.investorschronicle.co.uk/comment/2018/12/05/can-anything-stop-the-rightmove-juggernaut/

* One agent who has left Rightmove is SA Properties, with a single office in Swansea. It says in a testimonial for OnTheMarket that it removed its properties in July when paying almost £1,600 per month but, it claims, receiving only ten leads per month.

The firm, which went on to join OTM in August, says it has not suffered at all: “There is a belief that an agent has to be on Rightmove but that’s not true. If someone is genuinely looking for a new home, they will find it without Rightmove.”

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23 Comments

  1. Property Poke In The Eye

    RM was a great business a few years ago.

    I think they have overstepped the mark and priced themselves out of the market.

    They believed the rise of the FSBO / DIY agents will make up any shortfall in profits. Which is not going to be the case.

    The reason prices are increasing is because agents have become more savvy and have been leaving in the last 12 months and they need to make the shortfall which is only achieved by increasing the fees.

    More agents will leave in the next 12 months.

    REMEMBER No Properties, No Righmove.

     

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    1. International

      As I have said before, the industry seems to like shooting itself in the foot and to want s a chase to the bottom. All agents had the opportunity to drown Rightmove when OTM came around and regrettably through a lack of confidence ignored it.

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    2. The Blame Game

      In less than 4 weeks the French “yellow vest” protesters forced Macron’s government to climb down on taxes…… now verging on a total collapse of his ratings.

      Surely agents have  a collective strength to achieve the same with Rightmove.

      Problem is it needs a leader or leaders with clout to step forward and band agents in to action…..obviously minus the  barricades.

      If not just keep on and on and on talking about it!!

       

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      1. International

        Lets nominate Paul Smith

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  2. Ric

    The most impressive business which takes the credit away from the unpaid shelf fillers.

    If even 50% of property came off RM, and stayed off the end user behaviour would change.

    Rightmove would do well to remember there is no such thing as customer loyalty in the property portal world…. buyers will follow stock… the digital carpet treaders (95% of RM users) would also swap to another portal if an when they become “buyers” and want to find property.

    Final straw for me has been the attitude of asking why I choose to have High Street Offices if I don’t like the mandatory RM Tax imposed. If Rightmove promoted OFFICES I would have no issue, but as I have to pay EXTRA to promote an office, I see no reason for the mandatory tax.

    I welcome the tough market, as if stock levels grow the power of well known agents having clear market share of stock will mean they will be able to lead the way in changing the perception of which portal should be visited.

     

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  3. gardenflat

    Yes, us! Next question.

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  4. J1

    Nope

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  5. GPL

     

    Every single Estate Agent in the UK knows they can sell property without Rightmove …..that is a fact.

    Newspapers used to be the No1 Choice for Advertising, they are now history …..Rightmove now has “challengers” in various forms. What goodwill they ever had, if any, has evaporated ……because they consider themselves invincible, hence they twist their fee income screw harder & harder.

    The writing is already on the wall for Rightmove ……they either can’t see it or don’t believe it.

    I have very successfully sold properties without Rightmove, just like those “old estate agency days of mailing lists/hot buyers etc” ……none, not one, zero! of my sellers asked if the buyer came through Rightmove, they didn’t care!

    Nothing lasts forever.

     

     

     

     

     

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    1. Peter Green

      Quite simply RM’s “….ability to grow while achieving incredibly high profit margins and cash generation with very little capital investment has delivered sensational returns for its investors.” ……..is due to it’s stranglehold on the property portal industry.
      Ian Wilson of TPFG proposed the idea of a CMA referral back in October, but this was not followed up. Although a CMA referral could ultimately lead to no action being taken, it might put a dent in their share price for a while, as well as raise the potential issue to RM’s wider shareholder base. Attacking RM on a number of different fronts might also prove to be effective in the long run …damage/death by a thousand cuts……
      At present, however, most agents (including us) are just too scared to put their heads above the parapet. If you ever one needed an example of the power a monopoly holds over it’s customers, RM are a prime contender for number one spot !        

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  6. Budgie boy

    Zoopla has the potential to replace Rightmove as the No 1 portal, if only more agents would get behind them. Their site is user friendly, personally, the service I get from them is superb ( they actually listen to me) and 90% of my leads come from them. I reluctantly list with Rightmove, not because I get any leads from them ( less than 5%), but because my competitor agents would use the fact that I wasn’t, to deprive me of instructions if I didnt. OTM, well, in my experience, zero results, except for the odd “tyre kicker”.

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    1. P-Daddy

      Your comments Budgie Boy is proof to Rightmove as to why their strategy is justifiable! It needs a change of this mind set to make the difference. Once properties are listed elsewhere, the buyers and tenants will follow! We own their true value! A short sharp shock is what is required from their customers…us!

      IBM once had this view, that hardware was the future, they were invincible, and they showed an arrogant disregard for a spectacled geek called Bill Gates…..

      Thinks of it this way peoples. If your clients aren’t happy with you and your service because it is always the agent that is wrong and not the price or location, they sack you and move on. Now is the time for you to do the same. So say the Peoples Popular Front of Judea (lets see who can pick up on that one)

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      1. GPL

         

        I’m well documentated on PIE, for & against OTM however….

        ……they (OTM) won’t get a better chance at taking the No 1 Portal spot.

        Again, I don’t want 3, 4, 8, 9, 10 portals! Although to date, I get that Zoopla works for some and Rightmove for others.

        If all OTM want to do is create a No 2 or 3 Portal then the battle is lost before its begun.

        OTM’s silence remains deafening …..let’s hope its because they are driving forwards with great momentum ……rather than just hoping to edge towards their cash-in benefits.

         

         

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        1. dwell

          Reading that last paragraph…

          Coffee meet keyboard.

          Very funny indeed. Bravo.

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  7. WiltsAgent

    Surprised he makes no mention of the recent sale of 3.4 million shares by one of the directors. I would have thought that would be a clear enough indication of where the share price will be heading.

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  8. Woodentop

    RM did nothing, don’t fool yourselves. It was the agents that made RM.

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    1. GPL

       
      No argument there Woodentop. 
      Which makes you wonder why, if we made them? ….why can’t we jettison them?
      Of course we know why, because we can’t set aside our “competitiveness” because …..we refuse to alter our DNA. 
      Yet, Tesco, Sainsburys, M&S etc approach their “suppliers” and negotiate a “Collective Deal” ……if we discuss the same scenario, as multiple independents then “Cartel” is murmured. 
      It’s unjust, that Independent Estate Agency has effectively subsidised Corporate in terms of Portal Fees for years.
      I’m not in favour of any wild revolution however “Unity” within in Our Industry is long overdue and it does not need to effect our “competitive DNA”. The public/our consumer would actually benefit on a number of levels  
       
       
       
       

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  9. NickTurner

    Can anything stop the juggernaut that is Rightmove, asks Investors Chronicle? Unless they are careful and listen to their customers Righmove may stop themselves. Look at history; IBM as mentioned above, Nokia, and many more across all industries have all lost their once leading position . Recent , soon to be history, Emoov

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  10. Property Pundit

    Only an analyst could fail to spot just how vulnerable RM really is. As many regularly post on here; no listings = no rightmove. The turning-off of supply (listings) is a mere trickle at the moment but it could become exponential and fatal over a very short period of time. There was a lot of build up to the fall of the Berlin Wall but the actual event was more or less over in a day. Bring it on.

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  11. Mothers Ruin

    I’ve been with Rightmove for nearly 15 years and have just this week received an online survey from Rightmove to ask what I think about their service, with questions about Zoopla and OTM included. I have answered it frankly as I do like their website and I do like Rightmove Plus but I have scored it as 3/10 for value for money. I’ve also pointed out that I’ve had one visit from them in 15 years. I’ve not received a survey like this before from them so maybe they have no choice but to find out which Agents might just leave?

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    1. Anthonyw

      Spooky, we did too. No way will we invest time in completing it. They have blew their chance with us. Also, I think it is deliberate to weed out the complainers and obviously do ‘special’ deals with them so they stop complaining whilst they increase the prices with those who don’t complain (call my synical). Everybody should list on here what they pay RM with the following to see how fair it is:
      Agency size/Average stock
      Monthly RM fee
       

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  12. HIT MAN

    Woodentop is spot on, Agents made RM and I was one of them, NOT NOW it’s my goal to promote OTM as much and as often as possible, then eventually drop RM. If you value your business then it down to you to make it work, don’t mention RM to your customers take every opportunity to talk about OTM. (RM who? Never heard of them) most of my leads come from OTM I use all the features and list properties 48 hours before any other portal and I let everyone know. Registering buyers for property alerts and the other tools available you need to be used first. Instead of winging on here do something about it before you follow the same route a emoove.

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    1. Anthonyw

      Hit Man you don’t work at OTM by any chance?

      They are all as bad as each other. They all had their chance and blew it. Only a fool will part with their money to OTM. The shareholders are trying to lure you in on false promises. They are opportunists enjoying the flak RM are getting in the media. Some people on here have a very short memory. OTM will have to hike prices in exactly the same way as the others as your pockets are the only pockets they can dig in to – to keep investors happy. Yo really don’t believe investors care about us? Look at what happened to emoov – the mistake they made was getting investors involved as they control what you can and can’t do. Oh to be a fly on the wall at OTM board meetings where they are no doubt rubbing their hands in glee at RM being under attack yet again.

      Me personally would like to see RM, OTM and Z all shovelled up and put on an empty ireland somewhere so we can get on with things in our own way and start again. Customers really don’t care about what site they go on. If a sign went up tomorrow saying RM, OTM and Z have gone so you will have to go to XYZ then for a second or 2 they will feel inconvenienced till they find property in the new place. It is only agents who have this odd loyalty to these brands.

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      1. HIT MAN

        I don’t work for OTM, but their fees are massively cheaper than RM who have a strangle hold on agents at the moment and utill all agents do something about it they always will, if OTM wasn’t about then RM and Z would have continued to increase their fees and squeeze more from our profits. I’m with you on shovelling them all up but unfortunately we need somewhere to advertise, for me and many others OTM is the current answer.

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