Rightmove tells Agents ‘Let them eat Cake’
Estate agents trading from premises with locked doors or from home are being hit with large new demands from Rightmove, as they have increased their baseline pricing model for at least one agent by over 11%.
In essence Rightmove covered a 30M loss, when they put on hold the revenue, they would normally get from Agents during Lockdown 1.0, now possibly they are clawing it all back and some.
Here is in part the one-sided communication to one agent who has been with Rightmove for nearly 20 years, it begins by telling the agent they are paying more – no discussion just – you will be paying an extra 11%. (We had the permission of the agent).
‘We’ll change your price for 1st April 2021
Please speak to us by 26th February 2021 if you want to choose another option
I think it’s fair to say that we all expect some ups and downs in the property market, but I don’t think anyone expected the highs and lows we saw in 2020. Last year started with the busiest ever January for time spent on Rightmove, then by March the market was in lockdown. The resilience of agents during that period followed by a very quick pivot to a record-breaking mini boom, shows exactly how quickly our industry can respond to change.
During the six months that we supported estate and letting agents with a discounted Rightmove bill, we focused on delivering projects to help during a period of so much change. I’ve shared some of the highlights and how to take advantage of them later in this email.
Many of the tools we released in 2020 can help you deal with the shifts in activity and demand we’ve seen over the last year. The rise in demand meant we delivered 53% more sales leads at the end of 2020 compared to the same period in 2019¹, helping agents to agree an astounding 10% more sales over the year than in 2019². Even with the uncertainty at the start of 2021, sales demand is 11% higher than in 2020³ and rental leads are up 27%⁴.
It’s clear from these numbers that despite the impact that coronavirus has had on all our lives, both professionally and personally, people are still determined to move. That also tells us that tools to help you anticipate and deal with change will continue to have an important role to play. We also want to help you to do the important work that keeps the property market and the economy moving.
Change to your Rightmove costs
You currently pay £1,365.00 per month for your Essential package, as part of your Sales & Lettings membership. That is made up of £1,150.00 for your core membership and £215.00 in advertising products.
The price of your Essential package will change on 1st April 2021 when your core Rightmove membership rate will increase to £1,295.00. This rate is made up of £1,095.00 to advertise properties for sale. You don’t have to do anything, but you do have several options’
I read this as – market has been boom for you Mr Agent we want an extra slice of that action.
The reality though is that in total the number of completions in 2020 was in line with the 1.1M completions most years, there is no magic uplift for agent’s revenue, it just came in spurts between lockdowns.
What the C-suite of Rightmove forget is that between 2016 to 2019, Rightmove made about 74% gross profit annually , so in 2019, from a turnover of 290M there was pre-tax profit of 213M. Most agents operate on a pre-tax 18% gross profit margin, or as low as 10%
Clearly the sentiment is that a boom for agents in 2020 should be a boom for Rightmove, and by hiking the baseline fee to each agent by, 8% to 12% the figures numerous agents have shown Proptech-PR, that is adding anything from 15M to 20M plus in turnover in 12-months, or 5% to 7%.
With new technology in other portals and platforms ahead of the game, and failure to innovate, the last thing I would do after last year’s schism and wall of silence is hack off your core clients. As Countrywide Plc shows, a disconnect between the c-suite strategy and grass roots reality – leads to decline and a toxic brand.
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.