The three leading portals have rejected an appeal to give the industry a payment holiday to help firms through the Coronavirus crisis.
Estate Agent Today was approached yesterday morning by three independent agents exasperated about the prospect of sharply reduced revenue as a result of Coronavirus, which may well stretch over several months.
Amy Dixon, chief executive of online agency iMoveHome, contacted EAT on behalf of her firm and the High Street agency James Du Pavey - based in Nantwich and Eccleshall - and the Staffordshire High Street agency Dourish and Day.
Dixon told EAT: “As agents, we have had the most incredibly difficult 18 months, if we have survived Brexit, we are now to cope with Coronavirus. The market is suffering again and lenders are clamming up.
“The portals, being agents' largest company bill, have done nothing to help agents keep going. Surely now is the time. Mortgage lenders are offering three months payment holiday to anyone affected, interest rates dropped, the government are taking the damage to our economy seriously but the portals again offer nothing.
“Isn't it time the portals offered agents some ease and recognise they need to help too!
“If they do not react the only survivors will be the corporates - independents may not make it through another tough year of turmoil. James and Steve both run seriously good, award winning independent high street agencies, I am an online as you know - we are all going to suffer as the market spirals into decline.”
Yesterday morning EAT asked all three portals if they would consider a payment holiday, and we passed Ami's note to them to show the strength of feeling.
However, the request for help has been been dismissed out of hand.
Rightmove told us last evening: "We’re working with industry experts to run webinars over the next couple of weeks with practical advice to help support agents. We’ll be announcing details of these webinars on the Rightmove hub. The first one is live at 3pm on Monday March 16 with Peter Knight on how to prepare for and make the most of working from home. We’re also sending information to agents to help them prepare if they do need to run their business from home for a temporary period of time.
"We’ll be closely monitoring the situation in the coming weeks and will add more relevant topics to help agents. We’re closely following government guidance at Rightmove and we have plans in place for all employees to work from home if necessary which have been tested to ensure they’re fit for purpose.”
Andy Marshall, chief commercial officer for Zoopla, told us: "Naturally we are mindful of the impact of Coronavirus on our agent partners. We welcome moves made by the government to help the industry, which include a business rates holiday and promises to refund sick pay costs for employees off work due to the illness. While it is too early to say for certain, we hope that the steps taken by the government, combined with the strong start the market has enjoyed this year and the recent reduction in the Base Rate, making borrowing cheaper, will mean the Coronavirus only has a short-term impact on the housing market.”
A spokesperson for OnTheMarket told us: "The situation regarding the COVID-19 virus is clearly evolving rapidly and we are monitoring developments accordingly. OnTheMarket recognised last year the challenging market conditions which agents were facing and decided the right thing to do was to support our agent base with our 2020 Pricing Pledge. This determined not to increase listing fees in 2020 for any agents on full standard tariff contracts who signed five-year agreements at IPO, rather than being charged an increase of up to five per cent as allowed for within the agreement.
"Following the election in December and at the beginning of this year, the UK housing market saw a marked increase in transactions and a 'bounce' in sentiment. While it is too early to tell the wider impacts of the COVID-19 virus on the housing market, we will naturally continue to monitor the situation very closely. In the current environment, and as the agent-backed portal, OnTheMarket is as committed as ever to delivering high volumes of quality leads and a first-class support service at a sustainably fair price.”
In recent weeks Rightmove reported higher revenue and profits - both up eight per cent - with revenues of £289.3m in 2019 and operating profits at £213.7m.
Just this week OnTheMarket - in the same announcement as it revealed chief executive Ian Springett had been sacked - boasted that its revenues for the year to the end of January were above the £18m figure it had previously suggested: it declined to comment on any pay-off being made to Springett.
Zoopla is not listed on the London Stock Exchange but its owner - Silver Lake Partners, a US private equity firm specialising in technology investments - bought the ZPG company for £2.2 billion in 2018, and has since then invested heavily in its agency services.
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I sympathise with these agencies.
If you are thinking of doing the same, an alternative use of the time spent requesting a payment holiday (which is about as likely to happen as Lemsip sales going down right now) would be to communicate to buyers and sellers with
A) clear instructions of how you will manage viewings on clients homes to maximise chance of sale during the outbreak and minimise risk to all.
B) Clarity on how the office will function.
C) Social proof of other deals that are happening and number of people viewing, offering and moving.
More extreme measures to get cashflow moving to consider....
D) presenting a pay upfront offer to homes already on the market with you (and others) giving a hefty discount. "Bad news for us Mrs Seller, great news for you." The result may surprise you. Be VERY clear with the seller that this is pay regardless of sale and take some legal advice on your TOB. But its basically a PB model.
E) 7.5 percent commission discount on any high value deals that have exchanged but are more than 6 weeks to completion. In the past I offered a 5% discount on bills more than £10k with delayed completions of more than two months and half the clients would pay on exchange rather than completion, which in some cases was many months away.
Having said all that, this is the moment that the great agencies and agents wait for. If your one of those, lean in, get creative and enjoy every moment your competitors spend time moaning about what they can't influence.
Great agents make markets and are well prepared to take advantage of competitors who are financially weak or clueless or scared. If your only now working out what to do, your probably not one of them. But at least you will have a plan for next time external factors zig when you thought they would zag.
PropertyHeads says yes!
I’m not surprised they rejected it - most people aren’t keen to have the problems of others projected onto them.
Agents are welcome to get in touch with PropertyMutual and subscribe for free until the Covid 19 scare is over.
There is a Fundamental misalignment of interests between ‘Pay to List” portals and estate agents. Portals are focused on advertising KPIs v agents need more transactions as most of them offer a “No sale, no fee” service.
Unfortunately, when market conditions are bad for transactions, their portal costs are unchanged.
Who's surprised by Rightmove's response? If needs be, close your account and re-open it later? We get about 30% - 40% of leads off our website anyway and 40% of nothing at the moment is nothing. Or consider merging with another local agent or close and say it's the final straw of what has become a god awful industry.
Rightmove won’t last that long if this virus runs a seasonal flu corse, the next few months will be the slow down while uk is enjoying summer, when traditional flu season is upon us and the recession has hit, people are widley effected and the capitalist wheel that shitemove rely on is broken they’ll be begging people to pay less to market with them, and at that point they’ll forget the agents paying there fees and go straight to the homeowners. Capitalism will be the worse hit by the virus.
I'm embarrassed by the shameless opportunism on display in these comments and for the companies being suggested here as alternatives. Bad taste.
Well agents will be dropping like flies soon so Rightmove will lack customers.
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