BREAKING NEWS – top 5 stories 26/02/2021
BOOMIN STARTS ITS WAR OF WORDS WITH RIGHTMOVE
Michael Bruce one of the founders of Boomin has launched a scathing attack on Rightmove, focusing on its strategy of not reinvesting in technology to push the envelope and evolve the portals model, he also drew attention to the upward spike in cost for the agents.
Commenting that, ‘Based on the average annual fee hike of the last ten years, agents could be paying some 60 per cent more than their recently increased prices by 2024. On the same methodology Rightmove would be coining in some £385m in annual profits … Well consider that in 2010 … Rightmove’s average revenue per advertiser ARPA per month was £379 and their profits £57m. By 2019 this had increased to average agent fees of £1,088 per month and profits spiked nearly fourfold to £220m.’
For sure the gloves are now off.
RIGHTMOVE PROFIT LEVEL FALLS TO 60%
Annual financials for Rightmove show that the turnover figure reduced from just under 290M to 213M, impacted of course by a four-month period where fees to agents were considerably reduced during Lockdown 1.0. The net affect was that pre tax profits that had been running at 74% year on year from 2916 to 2019 fell.
In a pandemic world a 60% profit margin is still a triumph, but although the amount of site traffic was up, again due to everyone being at home, the number of transactions lettings and residential was in fact similar to pre-pandemic times, indicative that 90% of visitors to the site are browsers rather than ‘doing anything.’
CONNELLS BUY IN OF COUNTRYWIDE GETS CLOSER
The UK Financial conduct authority has approved the Connells acquisition of the assets of Countrywide PLC. The next hurdle is the Completion and Markets authority, though with the size of the new animal likely to be well under the level that would cause a problem, it looks like very soon the biggest agency in the UK will now be born.
WILL THE CHANCELLOR LOOK AT TAXING ALL PROPERTY?
There have been new signs that although the Chancellor may extend the SDLT holiday, he may also look at a new taxation system that touches those who have a second or more property. This was first discussed in Q4 of 2020. For sure the Chancellor has a difficult tightrope to walk, keeping the steam in the market, and yet extracting maximum taxable revenue, for some Wednesday the 3rd of March – mini budget day can not come soon enough.
Yesterday Zara my co-director pointed out that the ‘three month’ extension to the SDLT holiday due to end on the 31st of March was not a done deal. Despite many newspapers and many media channels proclaiming this to be the case.
In the present post-Trump world, it amuses Zara that perhaps the media and especially social media seems to be leading the narratives and the decisions, of our directly elected representatives in parliament. She also asked if Rishi would he be reducing taxation on sausages? I said it is unlikely, but we can always hope.
If you have a view – please let us all know by emailing me at [email protected] – Andrew Stanton Executive Editor – moving property and proptech forward.