The Property Franchise Group has used its muscle in signing significant and highly favourable new contracts with both OnTheMarket – which announced record traffic and leads to the stock market this morning (see details below) – and with Rightmove.
TPFG, which yesterday announced strong results for last year in a trading update, has a deal with Rightmove whereby every franchise will have price certainty for the next three years.
CEO Ian Wilson said: “For some of our offices, there will be a three-year price freeze.
“For others, there will be a better price than they had expected for this year, with a more modest rise.
“But every single one of our franchisees will be able to budget for their businesses knowing exactly what they will be paying Rightmove over the next three years.”
Wilson said that it would be impossible in the property world to be a “successful national business” without Rightmove.
He said that 80% of sales at the EweMove brand were reliant on Rightmove.
He said that he understood a number of larger agents were coming to the end of contracts with Rightmove, and pressing for one-year deals: “However, Rightmove is signalling that it is very strongly price ambitious.”
Wilson said that TPFG franchises had been asked if they were prepared to leave Rightmove: under 10% had said they would be.
Wilson said he saw no prospect of Rightmove being knocked off the top spot in the next three years.
And he said he had told OnTheMarket chief executive Ian Springett exactly that.
Of the deal with OTM, Wilson revealed that he had negotiated favourable prices for franchisees when the individual businesses come to the end of their free subscription periods.
He said that about seven TPFG franchisees were paying historic rates, having signed up to OTM from the start. Others were on free trials, which start coming to the end from now onwards.
“We have used our buying power to secure group discounts,” said Wilson.
EweMove franchisees, who operate an hybrid model, are not part of the OTM deal, but this will be reviewed in the summer, said Wilson.
Yesterday, TPFG announced a 10% increase in revenue for last year to £11.2m, against £10.2m the year before, with management fees up 14% to £9.5m.
By the end of last year, it had 55,000 rental properties under management, and supported 28 acquisitions by franchisees as independent agents “thinned out”.
TPFG also said that the tenant fees ban on June 1 will reduce the group’s lettings revenue this year by £0.5m – less than expected.
Wilson told EYE that unlike other high street models, franchising was doing well, with TFPG, Belvoir and Hunters all having produced robust performances.
He also did not rule out a future merger with arch rival Belvoir – although the two did abandon merger talks in late 2017 when Wilson accused Belvoir of attempting a hostile takeover.
Yesterday, however, Wilson told EYE: “There is a lot of logic to the two businesses coming together, but we are both doing well enough without that.
“If one of us were not performing, then increased government regulation would probably drive one large entity.
“But that is not happening now.”
- This morning, OTM announced a record of 23.5m visits to its portal in January – a new monthly record. As at January 31, OTM told the City that it had over 600,000 UK property listings, over 80% of Zoopla’s and 60% of Rightmove’s. It also said that in January, OTM delivered more than seven times as many phone and email leads to agents as in February last year. It confirmed that over the coming months it will seek to convert agents on free contracts to paid-for arrangements.
Comments (26)
Good luck to Ian getting a discount from rightmove, it’s the future for those independents who opt to remain, a continuous spiralling in charges to make up for closed branches and discount deals cut with chains, the likes of Purple Bricks and the other loss making online outfits.
For an independent single office or small chain of four or five branches remaining with rightmove is writing your own suicide note. They have allowed the fees for selling to be driven to the minimum while making vast profits at our expense.
In the article he reveals what we all know, the online outfits can’t function without rightmove . I suggest all High Street agents who have always been online anyway vote with their feet and leave rightmove to the online only loss makers and see how that works out for them.
We left almost a year ago and now 2 other local independents have done the same. You just don’t need it as Zoopla and OTM provide a better service for a fraction of the cost.
Thats a idea, if all the independents leave RM and online agents stay then buyers would soon stop looking on RM, we list loads of properties with vendors who are disappointed with the online agent, the usual comment is that they can never speak to a real person and don’t get feedback, in the northeast vendors are having a little dabble with onliners but soon discover they would be better using a high street tradition agent. I promot OTM as the portal that real estate use it works for me.
With open statements like this, it reads very much to me that Mr Wilson has, effectively, been bought.
RM offer an attractive deal for his brands in return for RM brand reinforcement from an industry leader. I’d imagine both sides feel they’ve got a good deal.
I have to say tying up a deal for 3 years is a bit like those people who rushed to fix their mortgage rates at 11%
When I gave my Notice to RM, my rep told me that my Landlords would expect me to be on rightmove. Wrong! My Landlords expect me to let their properties and then manage them effectively. They are not concerned about how I go about that as long as I get results. Ask your clients what the logo of rightmove is and some will tell you it is a roundel!! We have been going longer than any of the portals and will still be going when some have disappeared as a result of their own greed.
I remember when I took the decision to stop advertising in local papers – it was a hard decision, but had no negative effect. I am beginning to feel with what Rummage4 are looking at along with others venturing into the market, we are about to see the start of the portal dominance coming to an end, just like the local rags a few years ago – I might be wrong, but time will tell.
>I am beginning to feel with what Rummage4 are looking at along with others venturing into the market, we are about to see the start of the portal dominance coming to an end
It hasn’t come to an end and OTM have been around for a while and are free.
Very hard to overtake a recognised brand that has been established for years. You do get trends and the like, mainly from young people who like to boast to each other about how much better something they use is, but the homebuyer wants to find the maximum number of properties which new portals can’t offer.
I had a review call yesterday with RM and have politely informed them I will be leaving at the end of my six month tie in. As a small agency (through choice) I let approximately 30 properties a year and where once we were paying circa £4500 per annum, they have just increased this to over £9000 per annum (the last rise was a 20% increase).
I have been on Z for almost a year and have decided to spend the £9k on social media advertising and other forms of marketing. RM seem to forget that they are an advertising medium and I do not need them to help me grow my business. I have gone from a one man band to employing two further members of staff and all the time staying very profitable, but there comes a time when value for money has to be a factor. I no longer see RM as value for money.
The RM acct manager only trotted out the company line so it was a short phone call. It will be interesting to see what they say once my letter is received in June.
It is always difficult to foresee the future in the world of tech, and 3 years is a long time to be tied into a contract with a service provider that many are turning against and have started to leave in higher numbers due to poor service levels and price hikes mainly aimed at their smaller clients !
Regardless of any other costs to other buyers – as historically, larger firms have always paid less than us smaller independent agents, I simply focus on what is good value for my business and not worry too much about other businesses.
It became clear that RM were not offering value for money, and it appears Z is heading the same way based on the number of enquiries we receive compared to OTM.
For the last few months OTM are generating 3 – 6 times as many QUALITY enquires to my business and this seems to be ever improving via OTM and worsening via Z.
The results this morning from OTM do reflect the upturn I have seen in leads referred to me.
It’s not a “Strike?”….however, why would any company continue to OVERPAY a Service Supplier???
>why would any company continue to OVERPAY a Service Supplier?
‘Overpay’ is subjective.
I’m sure nobody would be paying it unless they thought it was worth it.
Personally as a homeowner I wouldn’t look anywhere else other than RM unless I found there was a significant number of properties that aren’t listed with them and they are elsewhere. I don’t want to be using multiple portals. Surely that’s reason enough.
I gave up phoning the number listed on RM because I soon worked out it wasn’t the best way to get in touch with the Agent. I just googled the Agent name and dialled the number. Or I would look in RM and drive around to look at a property and then phone the number on the board. These are leads from RM that the Agents i’ve used don’t even appreciate that they’ve come from RM. So very hard to put a value on what they give you even if you evaluate their worth purely on the data of contact via the RM website.
Then there are the other reasons I mentioned earlier.
And ‘no’ I’m not a RM shareholder.
“Overpay” is subjective however I’ve had 31 Years in this Industry and Sold Thousands of Homes, so, I think I am well qualified to judge value/service.
Rightmove DO NOT sell properties, Estate Agents DO.
The public are becoming much more aware of how to find properties advertised for sale. Convenience versus QUALITY of Buyer? As a Homeseller, I’ll prioritise the Quality of Buyer as No1 ……and that’s what an Intelligent/Effective/Professional/Adaptable Estate Agent will be looking for in a harder market.
Just because Rightmove tell you how big they are, it doesn’t actually mean they are effective for the HomeSeller or Buyer.
Rightmove are MOST EFFECTIVE at OVERCHARGING Estate Agents – to simply believe their marketing, in the same way as to believe Purplebricks marketing? ……it’s smoke n’ mirrors!!!
Estate Agents DELIVER for their clients, NOT portals.
2019 will focus the minds of most businesses, and for Estate Agents & Letting Agents it will focus their minds on what value portals deliver versus expenditure…. that Rightmove think they can turn the screw on the smaller agent yet financially kick the larger agent less? ……they are fools if they think their Gravy Train isn’t going to come to a shuddering halt.
I’ll happily back the Hard Working Local High Street Agent to deliver for their clients in a harder market, and to be able to adapt to that harder market.
The talk of “bitter winds on the horizon” for Estate Agents? ……not for those whose size makes them adaptable. Property Portals have dark clouds circling over them, lets see where they are in 2020.
Spot on GPL
>The public are becoming much more aware of how to find properties advertised for sale.
So where are the public coming from? What is taking them away from using RM in your opinion?
Percentage wise, what is the route the home buyer takes when buying? Have you measured this to the best of your ability? If so, how have you done this? Do you ask buyers who phone up? Do you ask those who come into the shop? Do you ask buyers who ask to be added to your lists?
Then apart from that you’ve got the value I mentioned earlier. A high price keeps new entrants out of the market – one sale lost. How much is that worth? Rightmove is the public’s portal of choice as far as I can tell but please provide any evidence you have to the contrary. I know these things vary from one part of the country to the next but when I listed with PurpleBricks 95% of the pageviews were via Rightmove. So if it’s the public’s portal of choice it makes sense that they want their properties listed on it surely?
I don’t have 30 years experience so please correct me if I’m wrong.
This is how you advertise on your website “Online we use ESPC/SPC, Rightmove & OnTheMarket to give your home maximum coverage”
Without RM you can’t say you are giving maximum coverage. Or do you disagree? Do you not think your clients want maximum coverage?
If you don’t provide maximum coverage I imagine your competitors will be quick to point it out. How much is one listing lost worth?
Going out now so can’t reply I’m afraid.
It’s interesting Cyberduck ….that you spout questions/seek answers or responses from me?
Last time I looked I was the one in charge of my business, not you.
Let’s just deal with a single comment from you as that’s all the time I can spare you, as you continue your profession as a “Professional Bystander”.
You commented…
This is how you advertise on your website “Online we use ESPC/SPC, Rightmove & OnTheMarket to give your home maximum coverage”
Just ZOOM in on this one word “ONLINE”. If you think I only sell properties by marketing ONLINE then you need to go and stand in a corner wearing your Pointy Bystanders Hat!
If you are going to Troll me personally then step out of your shadow, publish your details and if I find the time I can troll over your career.
Spineless Bystanders I can’t abide….
Profitable Agents should be happy with high RM prices.
1) It’s a barrier to entry 2) Unprofitable Agents will have to drop RM and the profitable Agents will be able to pick up the available listings, pitching to the home seller on the basis they are listed on Rightmove unlike the Agents who can’t afford to.
Leave RM and those owners selling with you will be getting letters and phone calls from the other Agents. Also have you actually advertised your services based on being with RM? What does your contract with the homeowner say? Can the client simply walk away and get their property on RM?
If all the Agents who can see this happening to them any time soon go on strike it simply accelerates the process. The profitable Agents will become more profitable and their RM fees will go up but not by as much as the extra profit they will make from their competitors going out of business.
Be kind to people on the way up, you’ll meet the same people on the way down!
I fully understand “buying muscle” which then leads me to this….
It seems entirely natural that Independent/Small Estate Agency/Letting Business form their own “Buying Group”, in respect of suppliers to Our Industry, in this case, Portal Advertising.
It’s been demonstrated repeatedly that with “scale” comes “more competitive” pricing.
There is no whiff of “Cartel” merely the common sense of “group buying”.
Any like minded agents are Welcome to email me with a view to forming a “Buying Group”
support@theestateagencyindustry.co.uk
Local High Street Estate Agents that fall into the Smaller or Independent Category should NOT be subsiding larger firms.
I DON’T have self-interest at heart, merely Our Industry
…..as teai.co.uk clearly demonstrates.
good idea, but if were going to start coordinating why not just bite the bullet and vote with our feet ?
Independents pay more so multi branches can pay less.
Don’t get me wrong, I understand purchase power but not with a 15 – 20 per cent increase for smaller agents. 5 per cent maybe.
There are more independents than there are multi branches, time to step up.
Why doesn’t the NAEA set up a buying group?
You expect NAEA to do something as sensibly proactive as that, frostie? See that pig…
The NAEA could not care less. Can someone please tell me what we get for our membership? They would be perfectly placed to help us negotiate with big firms/get discounts.
I asked our account manager what we got for our NAEA money, she didn’t respond or acknowledge, instead tried to get us to go to another “FREE” workshop, in April. I asked the question back in November.
I have found it quite frustrating how Propertymark have never taken the lead on this issue…I’ve asked them once, had a nice chat but it never went any further and never heard anything else and dont know how on my own to create waves. My office leaving wont make a bit of difference to them. Personally I feel there is some cosy relationship between the two of them them which I can’t put my finger on but its like Propertmark don’t want to rock the boat and they and Rightmove are laughing at us. If you’re not, stand up for us..I cant help thinking if we were in Australia or US the agents would be fighting tooth and nail to defend themselves
Use of buying muscle
Some of you won’t pay more to RM but will to OTM
Some of you will pay more to RM and will now pay for OTM.
So no matter what they pay more, good deal
So…. effectively both Rightmove & OTM are financially discriminating against smaller or independent Agents?
Yep, like a slow strangling sensation.