OnTheMarket says almost 500 branches have signed up in recent months, entitling their business owners to ‘welcome shares’.
Of those branches signing up to the new listing agreements, more than 60 per cent are currently contracted to list exclusively with OnTheMarket or on a one-other-portal basis of either Rightmove or Zoopla/Primelocation.
Launched on April 27, the contracts issue either £1,000 of shares per office with flexible portal choices, or £2,500 of shares per office if an agent commits to list exclusively with OTM for a minimum of 12 months.
OTM says that under both contracts, listing is free until 1 September 2020 and agents receive additional shares that equate to a percentage of the amount they pay until August 31 2022.
This is 50 per cent for periods of listing exclusively with OnTheMarket, 30 per cent for periods of listing on only one of Rightmove or Zoopla/Primelocation and 20 per cent for periods of listing on both Rightmove and Zoopla/Primelocation.
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Agents also receive discounts on their listing fees depending on whether they list on Rightmove and/or Zoopla/Primelocation as well as OnTheMarket.
OnTheMarket says it’s set a new personal record for leads it delivered to advertisers in June – over 1.8m with an average of 134 leads per advertiser in the month.
“This latest group are joining the thousands of existing estate and letting agents who are collectively the portal’s largest shareholder. The record month for leads, achieved despite a substantial reduction in advertising since the beginning of the COVID-19 lockdown, highlights the increasing value we are delivering to agents for their listing fees” says active chief executive Clive Beattie.
OnTheMarket’s share price dropped again yesterday, ending down 2.4 per cent.
This was despite the portal announcing a share giveaway to encourage new agents to join; the volume of shares they would receive would be dependent on them leaving one or both of the main portals.
By contrast, Rightmove’s share price yesterday rose 1.2 per cent.
All property share prices have taken a beating since the start of the Coronavirus crisis but over the long term OnTheMarket’s has fared less well than others in the sector.
OTM reached its all-time high share price of 176p in June 2018 but its current share price is worth under a third of that peak.
Rightmove, by contrast, was on a high of 688p as recently as February this year and after yesterday’s gain stands at 470p – still well over two thirds of its peak.
Earlier this month OTM revealed it had rescheduled some arrangements with creditors, was furloughing 22 per cent of its workforce, cutting temporary and sub-contracted IT workers by almost two thirds, and implementing a 20 per cent pay cut for the rest of the workforce and board members.
OTM’s share offer yesterday – with the most generous deals available only to those signing up and agreeing to drop the Big Two portals, Rightmove and Zoopla – left critics unimpressed.
Cheshire agency owner Maurice Kilbride tweeted of the OnTheMarket share proposal: “Wow! I am sure that will have agents clambering to sign up. Drop the other two portals and we will give you more shares in OTM! Which are trading at half their original value!”
Andrew Goldthorpe, chief executive of rival portal Property Mutual, commented on Estate Agent Today: “Surely that is limiting the options of the agent to market where they see fit? How is the agent able to act in the best interests of their client and market where and how they see fit? Haven’t we been here before?”
Russell Quirk, now a Keller Williams franchise part-owner, tweeted: “OTM advancing the same ethos again and expecting a different outcome. Success as a portal is not about mandating that your customers restrict their choice of advertisers. It’s about proposition, value and, above all, not being taken advantage of. For OTM that boat has sailed.”
Prominent agency industry analyst Anthony Codling is asking agents whether the board of OnTheMarket did the right thing by firing Ian Springett.
Codling – a prominent analyst formerly at investment bank Jefferies – has issued a 10 question survey asking agents questions including whether they believe OTM was correct in yesterday’s sacking, and whether the portal is staying true to its aims of becoming an alternative to Rightmove and Zoopla.
It goes on to ask specifically where Springett’s replacement should come from – whether it should be from within the existing team at OTM, from the wider agency sector, from another existing property portal, or from an agency industry supplier, or from outside the residential sector completely.
In addition to some general questions about Rightmove and the wider portal landscape, Codling concludes by asking: “If you could make one change to the strategy of OnTheMarket, what would it be?”
At Jefferies, Codling became a prominent industry figure for his searing analyses of Purplebricks’ sales record, and then in 2018 Codling quit the bank and became chief executive of property search firm Rummage4Property.
In December 2018 he was quoted by the Financial Times as saying that Countrywide and some 30 other estate agency groups signed up to Rummage, alongside some of the UK’s largest housebuilders. He suggested that Rummage would offer a listing service for just over a tenth of the cost of Rightmove.
Specifically, he said Rummage4Property would begin by charging a flat fee of £1200 a month and would link any changes to house price inflation. “The key selling point is that it is much cheaper than Rightmove, Zoopla and OnTheMarket plc” he told the paper.
However, Rummage4Property has not moved in the direction suggested by Codling, and he himself left the company towards the end of 2019. He has since been linked with an organisation called twindig.
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