Onthemarket.com was launched in January 2015 as a new property portal to challenge existing online property giants Rightmove and Zoopla – what does it mean for those buying and selling houses?
Why has Onthemarket.com been launched?
OTM has been set up by a group of bricks-and-mortar estate agents, ostensibly in response to the high charges levied by Rightmove and Zoopla, but in reality to try and protect their historical business model.
Historically, estate agents sold properties by having a high street presence. If you wanted to buy a property in a particular area you had to visit local estate agents and browse through their shop windows. Rightmove and Zoopla took this away, and they are now the shop window for selling houses – more than 90% of property sales start via a search on one of these portals.
One result of this change in buyer behaviour has been that estate agents no longer need to have the same high street presence, bringing with it the advent of online estate agents such as MyOnlineEstateAgent.com. These new entrants are able to compete in a very price-competitive way as they are not burdened with high property and staff costs, and can pass these savings on to consumers. Research by MOEA shows that UK house sellers could have saved more than £3billion in 2014 by using this modern, online alternative.
What’s so good about Onthemarket.com?
By launching a new portal, OTM is challenging the Rightmove and Zoopla duopoly. If this results in lower charges to estate agents, then this saving can be passed on to house sellers, which must be good. Rightmove and Zoopla are very profitable businesses, and charge high fees, as their latest published results show:
Revenue Pre-tax profit
Rightmove: Revenue – £140m. Pre-tax profit – £97m
Zoopla: Revenue – £80m. Pre-tax profit – £29m
In getting to this dominant position, Rightmove and Zoopla have spent £millions on developing their brand. Zoopla spends in the region of £20m on advertising every year, and has been doing so for a number of years in order to challenge RightMove. It is unfeasible that OTM will ever have the resource and clout to compete, but they are at least trying to challenge.
What could stop Onthemarket.com from being a success?
At present, they only have about 20% of agency branches signed up with them. So first-time buyers and anybody else looking to buy a property will only see a small proportion of available houses on this new portal. The OTM website has no new features that aren’t also available on Rightmove and Zoopla, so there is no compelling reason to use it.
Secondly, OTM is very clearly set up for its member agents’ benefit, not for consumers, creating an inherent conflict of interest. This is illustrated by the lack of a valuation tool on this new website, with OTM stating that providing such a tool would be bad for its members. Shouldn’t advertising portals look after buyers, and let estate agents look after sellers?
OTM has a very low share of web visitors. It launched on 26 January, and announced on 18 February that it had recorded its 1 millionth unique visit in that time; conversely Zoopla achieves over 500 million visits per annum, so has hugely more traffic. As such, if you are selling your property, it will be seen by a lot less people if your agent is advertising through OTM.
To compound this, OTM requires that its agents only advertise on either Rightmove or Zoopla, not both, so you can’t be on all three sites. If you are currently selling your property through an OTM agent you need to assess the impact this is having on finding a buyer – if you want to maximise exposure, advertise through an agent that is on both Rightmove and Zoopla, and this gives you the highest possible viewings.
Lastly, OTM does not allow online estate agents to list on their portal. Although not said outright, this is because they wish to protect the historical business practices for their members, and are threatened by the inevitable move to online models, as has happened in all other areas of consumer buying. OTM is using its new portal as a proverbial head-in-the-sand, but this won’t win consumer support.
Some final thoughts about Onthemarket.com
It is incredibly expensive to build a consumer brand that can challenge the likes of Rightmove and Zoopla – many have tried and failed. As OTM is purely funded by its members it simply does not have this marketing strength, and is highly unlikely to succeed. Once its departing trickle of agents becomes a stream and then a river it will eventually become a non-entity. But, whilst they are trying, it is making it hard for consumers to sell their properties, and this cannot be in the best interests of house-sellers.
Ultimately, it has been set up by high-street agents as a protectionist measure against cheaper online competitors. It is all about estate agents maintaining their profits, despite the general population have long-standing resentment to the fees they charge. Online estate agents have saved the average consumer £2,900 in 2014, and this represents a huge threat to the historical cartel operated by old-fashioned estate agents.