The managing partner of a regional independent has said that an IPO is the best chance that OnTheMarket has of succeeding and competing at the highest level. He said the IPO must succeed in order to stop Rightmove and Zoopla’s pricing strategies seeing agents’ costs escalate out of control.
Alan Williams of Fenn Wright, an expanding firm in East Anglia with currently eight branches, said he recognised that some OTM members are angry and upset – but that balance is needed in the debate.
He went on: “We are Gold members who invested in the Agents Mutual property portal idea from the outset.
“The membership has grown and the portal stats are good in the circumstances but there is no doubt that without a radical change of strategy it will not gain the momentum necessary to compete with Zoopla and Rightmove.
“The IPO offers an opportunity for the business to raise significant capital to bring the key benefit of the OnTheMarket portal to the attention of homebuyers and sellers and significantly grow the membership base.
“It would also end the original ‘one other portal’ requirement as well as opening up the site to online-only competition. It also provides the possibility of a significant return for original Agents Mutual investors.
“For me it’s about keeping focused on the key objective. The portal must succeed and compete at the highest level.
“This would offer agents (whether full service or online) an opportunity to invest in a portal that they collectively contribute to in terms of content and traffic. This would mean agents could access the market and compete at a reasonable monthly portal cost.
“Without the competition of a significant third portal, there is a risk that pricing strategy for RM and Zoopla could see agents’ costs escalate out of proportion to general running costs.”
Williams told EYE that the key USP – that of being able to list “new and exclusive” properties ahead of other portals – would continue to be important, and be attractive to both vendors and buyers.
He said: “Motivated buyers have a very good reason to register if they can ‘see it first’ at OnTheMarket and this is therefore a useful strategic option to be able to discuss with vendor clients.”
Williams said: “The IPO has to succeed. It is in the interests of agents, including online agents, and all of us who make our livings from estate agency.”
He added that the 10% discount available to OTM agents who continue to list with only one other portal after a flotation would be an attractive discount.
Williams said: “We dropped Zoopla to join OTM, and we have no plans to go back to Zoopla, even after the One Other Portal Rule is technically dropped.”
UPDATE 10.32am. Agents’ Mutual has asked us to state that: Contrary to comments posted today, the Board firms’ shares and those of management are subject to the same lock-in period as that of every Member firm. This period is transparently printed on page 17 of the Member Scheme document.