Analysts UBS have downgraded Zoopla to ‘neutral’ from a ‘buy’ position, citing competitive pressures from OnTheMarket.
It said Zoopla “continues to show no sign of a significant recovery in agents”.
UBS has left its ‘buy’ rating of Rightmove unchanged.
UBS said its Evidence Lab research team had found data indicating that OTM has continued its momentum into 2016.
While UBS said it maintained its view that “OTM is unlikely to be a major long-term player”, it said that there were still risks for Zoopla, which had been more impacted by OTM than Rightmove.
It said that Rightmove’s market-leading position remains strong.
It added: “Overall, we see the launch of OTM as having actually strengthened the position of Rightmove by making it a stronger number one in the segment, with Rightmove now having circa 65% more properties listed for resale than Zoopla.”
Despite the downgrade, UBS raised its share price target for Zoopla from 250p from 260p.
Separately, an analyst at Credit Suisse has raised with investors the issue of OTM chasing up payment and seeking to enforce its contracts with some agents through the sending of legal letters.
As reported yesterday, OTM has used a law firm to send the letters.
Joseph Barnet-Lamb, of Credit Suisse, has said in a note to investors: “We believe it can be argued that agents have cause to leave OTM with OTM debatably not having delivered the service they promised to agents.”
He says that most agents would not have the financial fire power to mount a legal challenge to OTM but “should the agent win such case we believe it could open the floodgates for other agents potentially leaving OTM”.
Yesterday, a spokesperson for OTM declined to say how many legal letters – from top law firm Eversheds – had been sent out, or whether it was the first time that such letters had been sent.
However, it is understood that OTM regard the matter as no more than normal credit control. OTM has also never made a secret of its determination to enforce its ‘one other portal’ rule.
Russell Quirk of eMoov, which as an online agent is banned from using OTM, yesterday said the situation was a “farce” with agents effectively suing one another.
He said: “Worse still, one of the Agents’ Mutual board members is the chairman [sic] of the NAEA who is effectively now suing dozens of his own members.”
He added: “From those agents we know who have received these letters, they will not be bullied by Savills and co to pay for something that doesn’t work, that they don’t want, that prevents them from serving their customers best and they are ready to challenge Agents’ Mutual’s legal threats.”
OTM declined to comment on Quirk’s claims.
Comments (40)
OPEN QUESTION to ‘Digital Expert’, ‘The Outsider’, ‘The Message’, ‘Harree’, ‘HarryN’, Danny, de da, de dum – whichever of you first responds, basically – the answer will be the same for you all…
What is it that alerts you to an OTM/Zoopla story on EYE?
I’m guessing it isn’t paranormal activity – so let’s wipe out everything from ‘things that go bump in the night’ to tarot cards and Ouija boards.
I also doubt that it’s a mass ‘sudden awareness’ thing – like a shared deja vu type event (or multiple events, as the case is…)
So…
Is it a phone call, I wonder? Does anyone reading this receive calls at 7am on the dot – and next thing you’re aware of it’s three in the afternoon and you’re still in your jim-jams wondering how that happened?
That would explain a lot, actually.
How’s about a good old SMS?
Email, maybe?
A klaxon, perhaps?
A Batmanesque sign reflected onto the clouds?
Or is it something utterly fantasmical and beyond even the realms of my overfertile imagination?
It’s gotta be something to being you out of the woodwork in your droves the way you appear like mice in a chocolate factory – come on and ‘fess up.
I can’t be the only one needing to know…
add in some upsell and they are probably making a profit.
I see 306 listing since April 1st
306 x £800 = £244,800 in 10 days..
At that run rate £735,000 a month..
Overhead of £500,000
Marketing cost of £500,000
PB look fine
Not an investor in PB.. But with that kind of cash generation, they will be fine.. Credibility builds daily. Brand awareness builds daily..
PaulC out of curiosity I took up your challenge to see why they are uploading so many properties
what I found was astonishing…
I decided to look at the marketing history of their properties that had been off the market for EXACTLY 2 weeks – this happens to be the exact timeframe that RM said its software picks up any properties that have been reloaded coincidence? I think not (one example was postcode PO30 1AP)
Now go through and just count all the properties that weren’t previously listed by PB 2+ weeks ago and I bet that number is remarkably different…
good luck
Pah! That’s not even a minor contender for potential #portaljuggle of the year, Clarkuk. Check THIS postcode out:
CF43 3DD
Make sure you go back at least March 2015 …
…IT’S WORTH IT! ;o)
hahahahahahahahahahahahahahahahahahahahha
I actually howled out loud.
Maybe they have some sort of listing tourettes???
Here’s a funny thing PB shares are doing really well.
But since the beginning of April PB have only listed 30 properties.
Now lets to the sums shall we.
They have a huge payrole plus massive advertising budget and they need to sell a lot of houses daily and therefore list even more daily to make any money.
At less than 4 new instructions per day average for this month does not bode well, but then I’m not a shares analyst so I guess PB shares must be cheap ????
‘Property Paddy’
Create yourself a Tw@tter account in that (or similar) name and look me up – https://twitter.com/Agent_PeeBee
Trust me – we need to ‘talk’.
There’s a massive elephant in the room isn’t there? Who’s going to mention the fact that AM/OTM have contravened their own terms and conditions by giving membership away for £50? Ok, it’ll just be me and David Bamforth
I do find it odd that PIE refuse to do any proper investigative journalism into this. It renders the whole site as rather one sided and therefore can be interpreted as propaganda. Not one mention of the truth – meanwhile another story on Zoopla Shares whilst they remain as robust as ever.
DE – Nobody has come forward with a £50 membership, Its just not true.
Smile, I hate to break it to you but I’ve personally seen several.
…just don’t expect to see actual evidence, smile please – trust him – take his word for it!
Believe me or not, it doesn’t really matter. What matters is that they exist. In numbers. They have even been discussed and acknowledged in regional OTM meetings. Do either of you attend these? If not, I’d recommend you do.
It is true, £50 OTM deals are abundant. My very own OTM account manager undermined my Gold membership offering £50 to a ex colleague in my area.
You wish for evidence? Call the OTM office, ask your account manager if all calls are recorded now ask them categorically if they are offering membership for £50. They will have to tell you the truth or lose integrity.
The question is, do you want to believe? The reality of OTM doing this completely undermines what they promised you in the first place, complete rate neutrality.
I’ve said it before and will say it again, the words ‘mutual’ have nothing to do with OTM.
The truth prevails. Thank you David.
Don’t expect a response from the above though…
I have asked and been told no.
I guess either you, I or OTM are fibbing – I know its not me, well i would say that!
I believe that you haven’t been told the truth…it is pretty much accepted public knowledge now.
Smile please, you now have a recorded call of an OTM account manager telling you they do not offer £50 deals, I would keep a reference of the date and time your call was made.
I can categorically say they are offering £50 for membership, it is not a nice thought that OTM would do this (especially to the first agents who invested the most) but I can tell you it is true and you have been deceived.
All I can say is keep hold of that recording, you may need it.
FYI
‘smile please’ is NOT an OTM Member.
You’re flogging the wrong – but still infinitely dead – horse.
I am guessing if some of these £50 memberships are out there (still do not think they are).
They are only for a set period i.e. 3 months or when they have the 7500 on board.
2 years fixed at £50 is the norm.
Two key points we need to focus on here. Quirk is right.
1. It is a complete farce. We agents already have a bad rep and now the demise of OTM has resulted in agents suing other agents.
2….take this a step further and you have the NAEA SUING ITS MEMBERS.
Mark Hayward, you need to step up and resign from the board. Why on earth did you ever think getting involved was a good idea? We don’t pay NAEA fees for this Mark…
Point 1, Think is irrelevant as public know little about it.
Point 2. As much as it hurts to say it i agree with Quirk, NAEA needs to decided if they are in favour of online agent or not. You cannot accept membership fees from them and then publicly endorse a portal which bans them.
Agents Mutiny –
If I was one of the agents impacted by these letters – I’d get a private forum going and build a fighting fund to stand as one. By pooling resources, they’d have the muscle to resist the challenge.
A sort of ‘Agent’s mutual’ co-operative if you like..
And speaking as a former lawyer, it’s always easier to pick off the small agents one by one – divide and conquer.
A class action defence will be the last thing they’d want. A precedent against them will be the bursting of the dam – They may prefer to settle out of court with gagging clauses to avoid the matter being decided. They would not want to lose one case in court given the implications for the business.
Glenn,
Putting aside if OTM works for you or not, you signed a binding contract to support OTM for X months/years and to not advertise elsewhere. The agreements i have seen from OTM are not service level agreements they are advertising agreements.
How would you feel if you found a buyer for a property but the seller did not like you and decided that you were not calling them enough with updates so they switch to another agent and kept the buyer, would you not go after them for the money?
In my opinion agents backing out at this stage says alot about them,
1. They cannot read a contract.
2. They cannot be trusted
3. They are ethically immoral.
4. They are make poor choices.
5. They must be poor agents to blame a portal for lack of business opportunities.
I hope OTM hold you to every penny, I hope you do take it to court and you lose and incur large legal costs. You made your choice stick with it.
*FYI I am not an OTM member.
And no doubt you’d recommend the same if you were a Zoopla agent being threatened by them for walking away from your contract?
Absolutely.
I never sign up to anything i am not sure is the right reason, as for Zoopla i negotiated a month by month deal.
One of many reasons i have not joined OTM is they do not have that option.
Agents businesses should take more care what they sign.
I suspect El Burro was responding to Glen’s rediculous comment, but you’re absolutely right Smile, you sign a contract you abide by it. Personally I find it staggering that agents feel that a contract should be one sided and that should they change their mind they should be able to cancel it. What would the country be like if that were the case… “Oh I know I’ve just bought your house but it doesn’t suit me now, here are the keys, can I have my money back”
“…as for Zoopla i negotiated a month by month deal… One of many reasons i have not joined OTM is they do not have that option.”
Well… actually, smile please – I will take this opportunity to remind you that there WAS an option available from the launch which isn’t a kick in the pants off what you refer to:
http://www.propertyindustryeye.com/agents-mutual-launches-bronze-membership-option-agents/
and in fact you responded to a comment (from the one and only Mr Fred Jones, no less…) on that article.
But I guess it didn’t suit you to give it a whirl…
Maybe things have changed, last guy who came to see me said it was a year contract – And miffed i did not get offered a £50 pm contract either!
I agree, if a group can make the government change its tack then a big enough group can beat this, “Splinta” would be a good name, it can chip away at its bullying achilles heel and “Nick” back its business street cred.
Good to see this. OTM IS WORKING!!
Next stop Rightmove…..
So analysts increase the share price expectation of Zoopla and then the story tells of agents withholding subs from OTM because they’ve been sold a dud.
Tell me where this story indicates that OTM IS WORKING?
Thought quirk wanted nothing to with PIE…
“Overall, we see the launch of OTM as having actually strengthened the position of Rightmove by making it a stronger number one in the segment, with Rightmove now having circa 65 per cent more properties listed for resale than Zoopla” says UBS.
Opposite effect to that which OTM was launched. At the very beginning of this debate I did state this would be the result. It is a reality.
And now the ‘Mutual’ has had to revert to issuing legal letters to ‘rebels’ whose business is adversely affected by not being on the 2 main national portals and many will not have the money to fight such action.
Nice work guys! The concept behind this was excellent – I was an independent agent for a number of years. The one portal rule has killed it and the end is nigh. When a ‘rebel’ with money does go to court as a result of OTM’s legal action, which they will, THAT will be the watershed moment for agents – if OTM loses it is the end. For those independents looking on from the side lines who may have been considering joining, please can you explain – why WOULD they now?
Because Zoopla is a dead duck JAM01. Are you seriously suggesting Zoopla doesn’t enforce its contracts?
I guess you’ll be a five year member then stuck in it so you have decided to suck it up and wait for another brave soul to come out fighting the good fight on whose shirt tails you will jump on once they have won and made it easier and cheaper for you to leave too. Zoopla for your info is a PLC and has to please its shareholders and provide them a dividend, otm is agents for agents and only has to make money to pay the salaries of those that run otm and of course the burn rate of the advertising whilst not consulting their members about running before learning to walk.
They have not provided the service they promised (in most parts of the country) therefor they are in breach of contract, it was a good move and idea that brought this portal to the table but the one portal,overseas website and bullying of those that got them to where they are today that has become its slowly rotting reputation and downfall
Zoopla a dead duck? Despite the downgrade, UBS raised its share price target for Zoopla from 250p from 260p.
What are you quacking on about?
Come on Danny where are you???
I’m not Danny, I’m not even the guy who wrote this below, but I just had to share it to you guys at PIE.
I wish someone would take OTM on. They don’t have a leg to stand on: – agent signs up pre-launch on the promise that by doing so they will be guaranteed the best rates (and this is confimed in writing on page 4 of the Information Memorandum included with their contract documentation) – they pay months of subscription for pretty much nothing (despite assurances that OTM will be No.2 by January 2016) PLUS they invest hundreds, if not thousands, in helping develop the thing – OTM then launches and starts signing up agents at 20% of the original launch rate card completely ignoring the price promise that they made to thousands of agents who funded the thing There is absolutely NO CHANCE that OTM will want this to get to court so I hope someone takes them on, refuses to settle and takes them for costs, their investment, all paid subscriptions to date. It would only take a few of these and the thing will implode and agents can get on with dealing with the real issues of the day. Oh, and the NAEA is keeping pretty quiet here. Given that they sit on the OTM board and would have sanctioned the suing of so many of their members, would it be reasonable to expect some sort of comment?