Property Portals: Will the Bubble Burst?
In an increasingly digital world few industries can exist solely on the high-street. This is a fact which has been widely accepted, especially amongst estate agents and letting agents who quickly adopted the use of property portals such as Zoopla and Rightmove in their work.
Be that as it may, the prominence of the aforementioned sites also sparked critiques of an uncompetitive market with some detractors commenting that Zoopla and Rightmove had formed a ‘duopoly’.
There's unrest in the industry and challenges are emerging, so will the bubble burst? Here's the latest on their biggest challenge...
In 2015, as the portal owned by agents, OnTheMarket was launched as an underdog but has since gained a considerable market share in a very short space of time.
The business was founded by a property consortium comprised of household names like Chestertons, Knight Frank and Savills has commendably gained the backing of agents due to the aggressively contended power of the two existing digital property portals.
Ian Springett, CEO of Onthemarket has alleged the founders of Zoopla and Rightmove are creating “super profits for their shareholders at the expense of their agent customers”.
Now, OnTheMarket is currently supported by over 4000 agencies across the United Kingdom and, though still a far cry from hosting the quantity of properties posted on their competitor’s sites, the company does boast a one-third share of the property portal market with approximately 6,000 individual estate agents and letting agents signed up for the service.
OnTheMarket, the agents portal, challenges Zoopla and Rightmove by obliging it's users to only use one of those in addition while they are using OnTheMarket. With most agents using both, this means that they will have to lose one in order to support the agents breakthrough. We know from the figures above that support is growing and the "duopoly" is being damaged.
However, representatives of Knight Frank and Savills were compelled to bring forward a tribunal case after estate agency Gascoigne Halman, attempted to break OnTheMarket’s contract terms by using both Zoople and Rightmove whilst on OnTheMarket. They stated the rule was not legal and gave hope again to the other two portals who had been witnessing a decline users.
Not exempt from the protocol of business the Goliaths have now been further challenged by the high-street agents who formed the third portal, as they continue with a this tribunal regarding ‘competition’.
Amidst wider debate over a possible boycott of Zoopla, this summer has seen the tribunal make significant progress with the ruling declaring that a, 'one other portal rule' is legal and can be enforced by Onthemarket for estate agents listing properties on its site. This decision stopped the site’s users from using more than one other competitor in the online property portal market, thus preventing listings appearing on the site whilst simultaneously appearing on Zoopla and Rightmove.
Despite the news coming to the delight of the owners of OnTheMarket, the ruling has also sparked some backlash from the Zoopla Property Group in response to allegations of an embargo campaign.
A representative of ZPG stated that, “We welcome competition based on innovation and performance but firmly believe that Onthemarket’s ‘one other portal’ rule is not in the interests of either agents or consumers.”. They then added that they believe the company has “ … failed to gain traction precisely because they don’t allow agents a free choice in their own marketing decisions and limit consumer choice and exposure.”
Springett has asserted that Onthemarket plan on responding to the ruling with further moves to expand the business and further challenge the ‘duopoly’, stating that, “in the immediate term, we will be ramping up our marketing activity to restore the strong growth in consumer traffic and leads Onthemarket was delivering over its first two years of operations".
In light of this decision, it’s fair to say that the bubble of online property portals has most likely burst which will make it easier for both agents and consumers to find what they need respectively. This month alone we’ve seen the launch of portals for ex-council properties and LGBT tenants, so OnTheMarket’s success could just be the tip of the iceberg when it comes to dealing with physical property in a digital landscape.
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