OnTheMarket has made a defiant response to news that Zoopla is growing both its estate agent membership and its property listings - but most City analysts say Zoopla's latest figures are good news for the number two portal.
Ian Springett, OTM’s chief executive, says Zoopla's growth of a net 213 agents in the quarter to the end of July is “tepid” and “a drop in the ocean in the context of its 23 per cent loss of agents (which equates to 3,812 agents) between September 2014 and March 31 2015.”
Springett says: “Support for OnTheMarket continues to increase daily and with such a strong desire for it to succeed from agents all across the UK - and a substantial growth in its traffic figures to more than 5.2m visits in July.”
He says the new portal can “ultimately achieve our objective to develop a proper alternative to the market leader” - although in his latest press statement he makes no reference to the claim made earlier in 2015 that by next February OTM would be the number two portal.
Meanwhile City analysts have boosted their financial ratings for Zoopla and some anticipate that its recent boost in membership may herald the defection of agents from OTM.
Canaccord Genuity has raised its share price target for Zoopla to 280p from 220p and says: "Zoopla's management is innovative and creative. It has handled the threat from OnTheMarket and its UK agency membership is now growing."
Global investment consultancy Jefferies - which advised Zoopla on its stock market debut in 2014 - says Zoopla’s trading statement yesterday heralded a turning of the tide.
“In our view the net growth and reduced churn of agency branches demonstrates that those that left the platform to join OnTheMarket have found it wanting, despite the relaxation of the one other portal rule. Over the next 12 months we expect many of the 3,000 or so Zoopla leavers to return” says a Jefferies statement. OTM has denied that it has relaxed its 'only one other portal' rule.
Numis says the Zoopla trading update was "solid" and the portal’s prospects were "encouraging” while the City AM business newspaper says while Zoopla was clearly hit by the launch of OnTheMarket at the start of 2015 “it's beginning to look like those effects were short-term.”
Zoopla’s statement to the City announced that it had seen a net growth of 213 estate agency branches in the period from April to the end of July which took its total UK agency membership up to 12,556. It also had 2,672 new home development members, 684 overseas members and 219 commercial members taking the total number of members at the end July to 16,131.
The listings inventory had grown seven per cent from 828,000 to 882,000 properties over the same period.
Traffic was also strong, with 45.6m monthly visits on average between April 1 and July 31. It also claimed to be sending “record numbers of appraisal leads to members, up 103 per cent over the same period last year and helping our members win more business”.
Zoopla shares closed yesterday up for the second successive day.
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Ian Springett is increasingly looking isolated, and detached from reality. To make any claims about progress when your traffic is 10% of Zoopla's, having spent, and continuing to spend, millions of its member's money, is a scandal.
Unfortunately its members have put too much faith in a very persuasive man who is not experienced in developing an online brand in 2015. Those involved in Primelocation will remember that once Daily Mail bought Prime in 2006, Springett immediately focused on pumping up his earn out as high as possible. There was no further innovation - just increased prices for a pretty poor product.
Good idea, and beyond the pre-launch sign-up campaign (which did not rely on technology at all), terrible execution. The board have a lot to answer for in that regard and I am not surprised that the guy from the North stepped away.
All the time this farce continues, Rightmove just get stronger and stronger. That is not good for me, my business or the industry as a whole.
I would ask those agency heads who made the decision to join - in good faith - to start planning to withdraw from this project which in almost every respect is delivering exactly the opposite of what most agents intended and wanted.
I was in a central London Agency the other day talking to the Principal, I noticed he was OTM and I asked him how he felt about it. For a moment he looked confused and after a while he said something to the effect of ''Ian Springett is a persuasive guy'. That was about all he could offer!
I have predicted that by the end of the year those agents who did not commit to five years will mainly leave OTM, especially in areas they don't dominate.
The ones who have committed for five years have a tricky problem though, unless OTM is prepared to admit defeat and allow them out of their contracts gracefully that is.
I think it would be interesting to hear something from Zoopla about there attitude to returning agents at this point.
Desperate stuff from OTM. It's quite sad, really, when you think about it.
I doubt we'll ever get the true story here. It's like politics, both sides will insist they're right - and come up with evidence to prove it - until they're red in the face. There is unlikely to be much compromise, so this will drag on and on.
As far as I can work out, it goes something like this: OTM's launch hit Zoopla much harder than RM because more agents defected from Z than their main rival. OTM enjoyed a post-launch bounce but haven't been able to build on this and have, if anything, gone backwards. Zoopla, on the other hand, have hit back, recovered and regained agents from OTM. They remain the No 2 portal, still way behind RM but also way ahead of OTM.
Is that about the crux of it?
Well yes but the tactics employed by OTM have worked against the interests of the industry.
They were self evidently flawed and the current situation was inevitable. Sadly a great opportunity has been missed, an opportunity to create anhonest broker between the big two.
If agents has dropped RM instead of Zoopla things would have looked very different, just a case of really poor judgement bY OTM and their followers
Sarah I was going to ignore you as you obviously have an outlook very warped and not inline with society.
But if you continue to make comments about me which boarder on liable. I will either speak to the owners of this site or indeed report you.
You managed to get yourself banned from the other site, it would be a shame to happen here as well.
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