The two major portals have unveiled their discounts and deals for agents facing a dramatic loss of business because of the Coronavirus.
In a surprise announcement this morning, Rightmove revealed it would slash its charges to agents by 75 per cent for four months.
The portal has also apologised for getting it so badly wrong with its deferred payment scheme, which was derided by customers - many of which left the portal in disgust this week.
A statement from Rightmove to agents says: “I don’t think many of us would have predicted sitting in our offices last week that we’d be where we are today, with the possibility of more restrictive measures approaching. Earlier this week we offered our independent estate and lettings agents a deferred payment scheme to help them through the next few months. The situation in the UK has changed rapidly and we’re sorry that it was too little and now inappropriate for the challenges we all face.
“Instead of offering the deferred payment scheme to independent estate and lettings agents, we're going to reduce your Rightmove bill by 75% for four months, starting from 1st April whether you advertise residential properties, new homes or commercial premises. You don’t need to apply for this discount, your invoice will automatically come through reduced by 75%. To be clear, this is not a deferred payment, this is a discount that you don’t need to pay back.
“Our CEO Peter Brooks-Johnson wants to say a few words as well. ‘I can only apologise that we didn’t move fast enough and do enough, especially given where the UK is now. Agents and developers are now having to make really difficult decisions to keep their business going and to plan for the coming months. We can’t predict the future but we know from events in the past that the market will come back, and there’s still a lot of activity on Rightmove. I can assure you that in the coming months we will be throwing our weight behind initiatives to help encourage market activity. In the meantime, I hope giving you 75% discount on your bill for the next four months from April will help and will ease some of the pressure you’re under.’”
Rightmove's formal announcement to shareholders was issued this morning as well and here it is in full:
The speed of the slowdown in the UK housing market has been significant. Notably the number of property transactions failing to complete in recent days and likely changes in tenant behaviour following the announcement of the renters' protections by the government may put further pressure on estate and lettings agents.
Although the likely duration of these market conditions is unclear, given this sudden challenge for customers Rightmove has chosen to offer more substantial assistance to support their businesses. This follows extensive dialogue we have had with many of them. We also firmly believe this rapid action is in the long term interests of our shareholders.
In recognition of the unprecedented environment we will today be contacting all our Agency, New Homes and Commercial customers to let them know that from April we will be discounting their invoices by 75% for the next four months, superseding our deferred payment offer.
The financial impact of these actions over the next four months will result in a reduction in revenue of £65m to £75m for the financial year ended 31 December 2020. The Board believes it is important to act quickly and we are able to implement this initiative given the strength of our balance sheet.
During this difficult time we will continue to innovate to make home moving easy for customers and home movers for our long term growth.
Peter Brooks-Johnson, CEO, commented:
“At Rightmove we are doing everything in our power to rise to the challenges of COVID-19.We have chosen to utilise our position to support our customers at this difficult time.”
Meanwhile Zoopla has announced two new fee structures available to agencies.
The portal’s statement this morning, released an hour after Rightmove's offer, says:
Option 1: Nine months of Zoopla for free
With this option, Zoopla offers nine months of portal usage entirely free, returning to normal fee levels thereafter, as part of an 18 month contract that follows the free term.
This is designed to support agents who recognise the benefits of establishing a long-term partnership with Zoopla, and who make a commitment to leave Rightmove once their current contract comes to an end.
Option 2: Three (to five) months of Zoopla for free
With this option, Zoopla offers three months of portal usage entirely free, returning to normal fee levels thereafter, as part of an 18 month contract that follows the free term. There is scope for the three month free term to be extended by a further two months, depending on whether the government limitations to control coronavirus have been lifted.
After the free period, agents will return to normal fee levels.
For both agreements, price increases will not exceed the RPI for the duration of the contract.
Agents are able to sign up to either deal up until the end of April 2020, with the new terms to take effect from May 1”
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That's better. But it's still a shame that their hand had to be forced. They should have done this in the first place
Rightmove showing their true colours! Greed got in the way of empathy.
“We have chosen to utilise our position to support our customers at this difficult time.” You have been forced more like...the penny dropped regarding the consequences of having a significant reduction in customers...sound like false contrition to me. I’m still thinking of leaving.
Yes they should have, and nice to see that they are now running scared and realise the impact it would have been on their cushy lives if we had all given them notice to quit - their arrogance and greed makes me so angry
the right amount to start - they are now breakeven but their customers will be using cash reserves - needs to be reviewed on ongoing basis
I think zoopla should now also make a move to reduce charges to breakeven levels
Don't be fooled, this is because the domino effect has started with agents putting in their notice. If you buckle now, you will pay for this later down the line. This has absolutely confirmed what we've always known - WE have the power to destroy them and they deserve a mass exodus after YEARS of abusing their customers. And now Zoopla have this morning responded by offering 9 months free if agents ditch RM. Now is the time for us to back OTM and Zoopla - forget RM we don't need them
This price war will continue.... i'd keep your powered dry.
This is what deflation looks like in reality.
Too little too late?
They have not all of a sudden offered this out of the kindness of their hearts, they have offered this because they have realised agents have finally had enough of their high fees and arrogant ways and their outrageous offer on Tuesday was the tip of the iceberg for many agents. With so many agents coming together, almost overnight the tables and completely turned and they are also now in a vulnerable position and desperate to keep our business.
Knowing how greedy Rightmove are, it would not surprise me if they offer this discount now, but make up the difference next year by increasing their fees by 20%! They do not care about us, they care about their profits, so without agents sticking with their decision to leave we will all end up in the same position when this terrible virus situation ends and Rightmove back to their arrogant selves. Why give them the benefit of the doubt? They have showed us no loyalty over the years, but milked us of every penny and without hesitation they will do the same. In these dark times for our industry, now is the ideal time to end this monopoly.
There is a Facebook group, which is seriously building momentum with all agents leaving the portal. If you are considering leaving or have given notice I would recommend joining it.
Stay safe all.
On the 11th of February mighty Rightmove had a share price of 701p, yesterday the share price fell to 475p, a 32.6% drop, and over an 11% drop in the last week.
They always say pride comes before a fall, in this case perhaps shareholders greed comes before the interests of the agents.
Dissent and upset, and anger is now being focused on Rightmove, yes all shares are getting hit, but Countrywide, Purplebricks and now Rightmove are showing they are out of step with the very industry they are in - you cannot fool all of the people all of the time - and if there is a mass exodus from Rightmove, those in the c-suite maybe deserve to be reminded who pays their salaries and bonuses.
So now today Rightmove reacts, pushing their chess piece across the black and white squares in what may prove to be a very bloody endgame, but as Harry Hill the elder statesman of agency and of course on the ground at the inception of Rightmove asks on another Linkedin post, 'will the 75% discount be enough?'
Everyone knows I back agents - being one for 32 years, and in equal measure I now back proptech - setting up Proptech-PR as a body to get agents informed and modernised.
I used my 2,500 database of agency decision makers yesterday speaking directly with and contacting nearly 300 decision makers who wanted to know which way to turn. I focused them all on Rightmove - telling them to be brave and take their moment - it was about paying a fair price for a service, and it was time to break the monopoly.
I also said RM needed to cover the next 4 months and maybe just eat the cost 100%, I said agents need to see that as a collective they have the power. Looking at Rightmove's reaction I think they are now listening. But will agents ever trust Rightmove again?
Also maybe agents need to look at the power of social media - as it has been used by many to get the attention of Rightmove, just think what it can do for your businesses - maybe portals are a nice to have and agents need to invest more in their own social media so they are in control.
How much revenue will RM lose when Countrywide finally closes its doors?
Also in light of the current situation, no one will be looking at moving house in the next 6 months due to the uncertainty we all face. If no one is moving, no one is looking, no one can borrow, no agents will have enquiries...
Question is, whilst RM and Zoopla is reducing their bills, revenue reduced to £0, what are the agents doing in the next 12 weeks to grow their brands through help, advice, assistance to their community so that when the madness calms they have the greatest locally recognised brand?
I applaud the fact that ‘Pay to List’ portals are offering discounts to estate agents.
This is the right thing to do in the current environment.
However, what has happened in last few days is testament to the significant misalignment between portals and estate agents (their customers). It is a ‘them against us’ scenario instead of a collaborative one.
I strongly believe that portals will need to review their commercial proposition in long term. The ever increasing monthly fees are unfair and unsustainable.Agents should not be charged for listings – full stop. They provide the necessary data to make portals successful in the first place.
No portal could exist without property listings, so it is bizarre that agents also have to pay for the data they provide.
Agents work with a ‘no sale, no fee’ model. Maybe portals should adopt the same concept?
Tricky times for all of us.
When all this is over the landscape will be changed and we will all have to find a new way of working and looking after our clients.
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