Now a third online property marketplace has arrived, OnTheMarket.com, backed by a coalition of estate agents calling themselves the Agents’ Mutual. Yet its plans to muscle in don’t seem to depend on it creating a better product - agents wanting to join its platform are restricted to using one other portal. Of the fifth of UK agents who've said they'll sign up more than three quarters are opting for Rightmove over Zoopla.
In fact, while OnTheMarket.com describes itself as "state of the art", Rightmove and Zoopla offer better functionality. As both buyer and seller, I've found Zoopla a particularly useful tool for researching property histories and valuation data - information that I've felt put me on a more level footing with local estate agents but which OnTheMarket.com describes as "unnecessary".
That, I believe, clearly highlights the motive of Agents’ Mutual - to wrest back some of the power that the internet has seen estate agents cede to buyers and sellers. Certainly the idea of agents being squeezed by Zoopla and Rightmove’s combined listing costs totalling £1,000 per month per office does not sound especially punitive when agency fees on the average UK house sale are a whopping £3,750. And its surely money better spent than on the pages of local ads agents once relied upon – finding every property on the market in one online location is far more valuable to buyers, and Agents Mutual threatens to undermine this customer-friendly progress.
Both Zoopla and Rightmove also, unlike OnTheMarket.com, allow listings from DIY estate agencies like eMoov that let you sell your house for significantly less. These services are under-used right now, but growing steadily and another example of the internet-led disruption that estate agents, via Agents Mutual, are now doing their very best to squash not through their own innovation, but by trying to preserve an unpalatable status quo with anti-competitive behaviour.
Fears that OnTheMarket.com would arrive to eat Zoopla’s lunch had caused its shares to slump nearly 30 per cent since its IPO last year – now, its underwhelming launch has prompted a bounce. Yet although Zoopla is a much better product, I nevertheless fear that investors may be getting somewhat ahead of themselves: it may offer the wrong kind of disruption, but for all of its shortcomings OnTheMarket.com could still prompt a long speculated price war if agents do start to defect.
More worryingly still though is the imminent general election, which threatens a hiatus in property market activity in the first six months of 2015. As we look at the prospects for every sector of the FTSE 350 this week, residential property services – whether online portals or estate agencies - is one sub sector I’d still avoid.
