No plans for OTM to drop ‘one other portal’ rule

I generally like the coverage on this website but on this subject you really let yourselves down – especially when you will know that the vast majority of your readership won’t have an FT subscription. You make it sound like it is a positive news story. I do have an FT subscription so I have copied the story here for the benefit of your readers.

Estate agents prepare to move out of property portal OnTheMarket
Zoopla rival embroiled in a row about fees and its traction with consumers
Judith Evans

Hundreds of estate agents have turned against the challenger property portal OnTheMarket a year after it launched, as they prepare to ditch the start-up following a row about fees.

OnTheMarket was set up last year to disrupt the home sales process by offering a cheaper alternative to agents looking to list their properties. It aimed to wrest control from the two market leaders, Rightmove and Zoopla, by allowing estate agents to list homes on only one other major competitor.

But its relationship with many of its agents appears to have rapidly soured.

OnTheMarket promised that early converts to its site would be rewarded with discounted subscription rates. But it has since offered even lower prices to new recruits, angering those who signed up at the time of launch, according to property consultants and analysts covering the sector. They said agents had also been dissatisfied with the portal’s service and its traction with consumers.

Iain White, a property consultant, said he was in contact with more than 200 estate agencies seeking to leave OnTheMarket. Analysts and investors in the industry were also aware of the agents’ intentions.

The agents have pledged sums totalling six figures for potential legal action against OnTheMarket.

Ian Springett, chief executive of OnTheMarket, said the company “set our subscription fees for a range of periods at levels which are designed to enable us to compete effectively in the prevailing market”.

The agents’ attempts to sever ties with OnTheMarket have sparked a row with the portal, which wrote to its members threatening to take legal action over the non-payment of fees or the violation of its “one other portal” rule.

OnTheMarket, which was set up by a consortium of agents in January 2015, said it had sent these to “a very small minority” of agent customers.

Estate agents who received the letters are exploring the possibility of retaliating with their own legal action against OnTheMarket on contractual issues. Most of the agents that signed up to OnTheMarket have five-year contracts.

Anthony Codling, analyst at Jefferies, the investment bank, said: “This is the first time we have seen OnTheMarket members campaigning against OnTheMarket. Is this the beginning of the end for the one-portal rule?”

OnTheMarket and rival portals including Zoopla and Rightmove do not disclose their fee structures.

Mr White said hundreds of agents had contacted him after the trade publication Estate Agent Today covered attempts by three of his estate agent clients to leave the portal.

“They were unhappy with its results and with its customer service so they chose to take action and give notice to OnTheMarket … they later received legal threats,” he said.

OnTheMarket says more than 6,000 estate agents and letting agents use its portal, while its website received 7m visits in March.

The group received a boost when UBS, the Swiss bank, downgraded rival property portal Zoopla from a “buy” rating to “neutral” this month because of competition from OnTheMarket.

Nevertheless the share prices of both Zoopla and Rightmove — two of the UK’s most popular websites — have risen by about a quarter in the past year. Both sites continued to increase the number of estate agents that listed on their sites last year.

OnTheMarket attracted major players such as Knight Frank and Savills when it launched last year.

But it has had to tackle the challenge of building up its brand among consumers, while persuading agents it was worthwhile to switch. Its numbers still lag behind the more than 16,600 agent members reported by Zoopla in February and Rightmove’s 19,700.

Mr Springett said support for the portal “continues to grow” and that it has “no plans to relax the ‘one other portal’ rule”.

On the legal letters, he said: “Like most organisations, we see it as standard practice to seek outstanding payments from customers if they are in arrears. On behalf of the broad membership of [parent company] Agents’ Mutual, we also work to ensure that our agents meet their obligations.”