A new report on Rightmove by investment bank Morgan Stanley says that Agents’ Mutual would be a “non-issue”  – meaning it would have dismissed its challenge out of  hand – if it weren’t for the exclusivity clause.

The report, called Mutual Understanding, specifically looks into the threat posed by Agents’ Mutual.

The report says that Morgan Stanley has now incorporated a drop of 500 members of Rightmove into its forecast next year – the equivalent of 2.5% in terms of revenue and 3% in terms of profit.

But, says the report, the long-term impact will be “very limited” and Rightmove will continue to go ahead with price increases “despite minor swings in membership”.

In the short term, it says, Agents’ Mutual could take up to 3,000 (or 25%) of members from both Zoopla and Rightmove, but most of the exodus would be from Zoopla.

It goes on: “Because of Rightmove’s clear leading position on traffic, leads and engagement, we would view Agents’ Mutual as a non-issue if it weren’t for the exclusivity clause.”

It explains to investors: “Agents’ Mutual plans to launch an internet portal called OnTheMarket.

“Agents who commit to it will only be allowed to advertise on one other portal – meaning an agent would have to choose between continuing with either Rightmove or Zoopa after joining OnTheMarket but could not continue advertising on both.”

The fact that Morgan Stanley says Agents’ Mutual would be a non-issue were it not for its “one other portal” rule suggests the bank has recognised that entry by a newcomer into the existing duopoly market would be impossible were it not for such a rule.

So far, a large number of challengers without such a rule have either fallen by the wayside or failed to make any headway while trying to get established.

Eye’s understanding of competition law is that special rules can and do apply while newcomers try to establish themselves in the market.

The report suggests that Zoopla will bear the main brunt of OnTheMarket agents ditching either Rightmove or Zoopla.

It predicts that Rightmove’s current market share of 84% would fall to 81%, Zoopla’s market share would drop from 81% to 69%, and OnTheMarket would achieve 25% market share.

The Morgan Stanley figures, based on interviews by Alphawise with 169 agents in October, says that of those agents signed up to OnTheMarket, 9% intend to drop Rightmove and 35% Zoopla, with the rest still undecided.

Of those 169 agents, the research says that over half (53%) had already signed up to OnTheMarket. Of those who hadn’t, a further 53% said they were either “very likely” or “quite likely” to join.

The report also discusses online or hybrid agents, citing purplebricks.com which charges a fixed fee of £665 plus VAT – “much more economical than a brick-and-mortar agent”, observes Morgan Stanley.

It believes that excluding virtual agents – which the report says are succeeding because they provide a useful service to some sellers – is a mistake: “Creating a portal that excludes virtual agents will not make them [online agents] less of a threat, it will just limit the attractiveness of the new portal.”

The report also looks into what could happen to Rightmove’s charges to agents next year and beyond.

In one scenario, there might be a housing market slowdown next year but 8% annual growth would follow, with Rightmove able to put through annual rises of 10%.

In another, if Agents’ Mutual launches with 5,000 members, Rightmove could lose 10% of members. It would still put through a £60 price increase per annum.

In the worse-case scenario, the market could undergo a 2008-style collapse next year, in which case Rightmove would freeze its prices.

Morgan Stanley has given Rightmove an “overweight” rating, targeting its shares at 2,380p. They ended yesterday at 2,205p.