OnTheMarket says estate agencies with some 1,000 offices have joined the portal in the five weeks since it floated on the London Stock Exchange, taking the number of branches covered by listing agreements to over 6,500.
In a statement to shareholders this morning the firm says: “Key to the company's new growth strategy is a substantial increase in the core customer base of estate and lettings agents, whose role in the property portals market is to provide the portal operators with both revenue and property listings content.”
Ian Springett, chief executive officer of OnTheMarket, says: "We are extremely pleased at the level of support we have experienced for an agent-backed challenger portal and at such a rapid and substantial increase in the number of signed-up estate agent offices in the first five weeks since admission to [the Alternative Investment Market].
"We believe that as we expand our sales team, we shall continue to sign up more and more new estate and lettings businesses up and down the country. We have already started to ramp up our marketing activity in line with the increase in our property stock and we are continuing to expand our sales, IT and marketing teams to support our new growth strategy.
"Our disruptive strategy to become a full-scale competitor to the market-leading portals with sustainable fair-pricing for agents has been overwhelmingly supported so far, giving us the ideal platform to build rapidly upon this early progress."
The statement adds that the portal intends to achieve rapid growth through a combination of:
- offering equity participation using Agent Recruitment Shares to selected new agents alongside long-term listing agreements, with arrangements in place to restrict agents from the short-term sale of any Agent Recruitment Shares and to align their interests as shareholders with the success of the company; and
- offering selected other agents free or discounted rates for an introductory period, with a view to converting these agents to a standard paying agreement once the portal has demonstrated advertising value to them.
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So what does this mean? Well, logically if OTM is offering to virtually pay for listings some agents are going to join. However, the real question is, what will make them pay a commercial rate? The answer is a commercial number of leads which will be much harder to achieve than buying listings. The crunch will come when the paid for contracts start ending in less than two years, in the meantime look forward to an an expensive but ineffective attempt by OTM to chase audience
We are at last getting some leads coming in from the OTM portal
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