Ed Mead, a director of Agents Mutual founding member Douglas & Gordon, commented: “It is quite extraordinary that Rightmove and Zoopla have not noticed that thousands of estate agents will leaving their websites at the start of 2015.” Zoopla are reported to be planning a float on the London Stock Exchange this year and valuations of up to £1.4bn have been mooted. A Rightmove shareholder quoted in the Financial Times felt that its website had achieved sufficient scale to survive the new threat. Another observer said that Agents Mutual will be dominated by big players and will struggle to recruit the thousands of small agencies that make up the bulk of the market. Call a property lawyer who can advise on all aspects of buying, selling and mortgaging property.
New site will be “democratic”
Some members of the established sites have complained that they do not invest enough in improving the service to agents and that they prioritise giving cash back to shareholders. They have allegedly seen website agency card rates rise 50% in two years, without seeing significant returns. Agents Mutual has attracted £6m in seed capital and has pledged not to carry advertising. Mr Mead of Douglas & Gordon added: “The cost element is important and it will never be sold, one agent one vote regardless of size, what could be more democratic?”
Ian Springett, who is heading Agents Mutual, explained the mission further: “When Zoopla launched it was thought that it would create stronger competition to Rightmove and bring about some price competition, but the reverse has happened. Rightmove continues to increase prices and then Zoopla simply does the same to catch up. As far as the estate agents are concerned it is a duopoly, with these two big groups making super profits up against lots of very small estate agency businesses.”
Anthony Hilton in the London Evening Standard argues that the arrival of Agents Mutual could be bad news for customers as their properties may no longer be advertised as widely because of the restriction imposed by the new venture on agents advertising properties elsewhere. “Service organisations always have to strike a balance between maximising profits and delivering the best possible package to clients, and it is all too easy to let the search for profit take precedence,” he comments.
Rightmove and Zoopla were a welcome revelation for the property market he declares: “Before the internet, potential buyers had to put themselves on the books of estate agents in the areas where they might like to live and wait for particulars of homes coming on the market to drop through the letterbox or alternatively scour the advertisements in the local papers. Today, 90% of them begin their search online. Not only can home-seekers get access to details for far more properties than they would ever have got from a local agent but they can also describe the house they want and the site will tell them pretty accurately how much that would cost in whichever area they choose.”
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