Is this the moment?
Are we starting to see the first, big chink in the hitherto impenetrable armour of Rightmove and its relentlessly rising rates?
OpenRent has quit / been booted off Rightmove (delete depending on your PR perspective). Essentially, whatever sweetheart deal OpenRent had agreed with the previous regime didn’t get past RM’s newish CEO, Johan Svanstrom, and his unwavering zeal to hit his 2028 targets (£2k per branch per month).
Rightmove went in hard in its latest contract ‘negotiation’, as is its wont. OpenRent countered with noises about its 8% national stock levels contributing to RM’s attractiveness to tenants, and to a potential revenue hole in Rightmove’s coffers.
RM, in essence, told them where to go. Either OpenRent paid the higher amount or OR would have to leave the site. Presumably OR looked at the numbers, understood what this would mean for their profitability (as so many agents have to do) – then balanced that against its product offering to landlords – and decided that it would have to bite the bullet.
What were the issues on each side? Well, OpenRent’s pitch to landlords has been pretty strongly predicated on selling cheap access to all the portals, including Rightmove. Whatever the deal that they initially agreed with RM – and you can bet it was a pretty generous one, judging by the amount that OpenRent was able to get away with charging – that cheapness, including a Rightmove ad, was not on the cards any longer.
On Rightmove’s side, the consideration was (and always is) money – could they get to the £2k per branch per month 2028 target if they still had one business (representing what they later acknowledged in a statement to the Stock Market represented 700 branches’ worth of stock) paying a fraction of that?
Looked at one way, Rightmove has just helped agents compete with OpenRent. However, what they’ve really done is screwed agents even further into the ground.
Let me explain.
I was with a strong multi-branch independent agency earlier this week, presenting ‘AI in EA’ to their whole team. The biggest competitor to their lettings business locally is OpenRent. This Rightmove withdrawal was, it was clear from the tone of the meeting, going to be used as a wedge to gain landlords. The pitch? That this estate agency was on Rightmove and OpenRent was not.
Thus reinforcing that, in order to get the best price for their rental property, the landlord needed to be with an agent on Rightmove.
I worry – a lot – that this is just playing into Rightmove’s hands. It’s been the basis of their reinforced dominance for 25 years now – agents cutting each others’ throats regardless of business model, to secure short-term wins over long-term strategy.
There is no long-term benefit, for anyone, of landlords believing that Rightmove is the best place to be seen for rental properties. It’s fair to say that – on the rental side at least – Zoopla is competitive, and occasional market leader, particularly in cities. Working over OpenRent’s landlords and telling them that they should be with an agent on Rightmove does one thing, and one thing only – it means that you will have to stay on Rightmove for as long as you want to continue servicing that landlord.
OpenRent aren’t the best competitor but at least they’re honest. Unlike the shady Purplebricks pitch, backed by millions of pounds of dead investor funds that distort the market, OpenRent is unashamedly cheap. If you’re a landlord looking for bargain-bucket service at bargain-bucket prices then this could be the place for you.
Is that landlord the right one for you? Are you going to pick up enough of them to offset the £500+ increase in your monthly (monthly!) Rightmove fees over the next four years? And you need to get that £500+ in profit, of course, not just fees – these landlords will take management time, too, and they’re the ones that will likely want the most for the least.
OpenRent obviously negotiated an astonishing deal with Rightmove at the outset which then persisted over years, before it hit the wall of RM’s relentless upgrade in pricing. It’s fair that they’ve had to think about this, in the same way that every other agent has.
Make no mistake, however – championing this as a win for those still on Rightmove will be hugely counter-productive. If RM can believe that the 8% of its lettings’ stock that OpenRent listed can be dragged back onto the site by agents that remain with it, that’s a story they will tell themselves again and again when they consider their price increases.
In short – if they can boot OpenRent off and all of the landlords decamp to an agent that’s with them, they sure as hell aren’t going to care less about your empty threats to leave.
They’re going to get even bolder about price increases – and assume that your vendors will just pop across to that competitor over the street if you start to squeal.
Weird as it may seem – the best thing that other lettings agents can do right now is not to dance on the grave of OpenRent. Instead, they ought to be following them out of the Rightmove door …
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