PropertyMutual is the independent collective voice to mitigate real estate marketing costs and curate data.
This article refers to Jefferies Investment Bank report dated 9/12/19 which has reviewed Rightmove and the UK portal market and decided RMV:LN is “under perform” with a target price of 500p. This is startling, given the seemingly relentless rise of Rightmove’s market capitalisation to in excess of £5.5bn. I am not aware of how much, if any, skin in the game Jefferies or other investment banks have but I imagine most take a keen interest in the future of Rightmove with many commentators beginning to question how long RM can sustain its growth and model. The key takeaway, for any who care to listen, is their rationale which, in my opinion, should be taken as a clear signal to property professionals everywhere.
It boils down to “now is the time for agents to take collective action”. They see Rightmove as “a business with strong fundamentals", but the current housing market is impacting agents’ margins; under the current housing market conditions, they believe more agents will be forced to either exit the industry or sign introductory “free” contracts with competitors, which in turn puts pressure on Rightmove. They argue that Rightmove has reached “peak utility at the bottom of the cycle”.
In such a well-researched and widely distributed report by a leading investment bank, I am proud that PropertyMutual is the only Rightmove disruptor mentioned in the executive summary alongside the other two corporate portals (ZPG and OTM). It states, “It is really only the agent’s fear of losing an instruction from not being on Rightmove that holds back the churn – the greatest threat to Rightmove is therefore collective action across the estate agency industry to communally break free of what has been described as “an abusive relationship”. Unless Property Mutual rapidly can drive such groupthink, this isn’t imminently likely”. The report further says, “PropertyMutual has an incredibly disruptive blueprint that would take the agency-portal relationship all the way back to its pure-play mutual Roots”.
“Groupthink” and “collective action” perfectly summarises PropertyMutual and is the business model we pitched to the RICS and NFoPP back in 2013, a whole two years before our noisy neighbour’s launched a competitor portal with big promises. Back in 2013, RICS naturally had to remain neutral but applauded our ethical, mutual business model. NFoPP told me a one other portal rule was “ridiculous” but did not back me. Disappointed, but believing in the long-term benefits of mutuality, we launched PropertyMutual as a free portal in 2014, keeping faith that agents would ultimately recognise PropertyMutual as the best tool for enabling collective action.
Jefferies states “Conditions are therefore ripe for existing competitors (Zoopla and OTM) but perhaps even better for a portal that can return the sector to its agency-back roots. There are two clear contenders vying to do exactly that – but both have a massive challenge on their hand to drive real change: PropertyMutual and Rummage4Property”.
It concludes that the situation created by Rightmove “is a self-created psychological handcuffs that can only be broken by collective action. OnTheMarket came with the model to do exactly that (agency-backed) but is on the course to undershooting its early potential. New entrants like PropertyMutual and Rummage4Property have exactly the construct needed to return the industry back to a sustainable agency-backed model. But the challenge is to drive collective action: we think the cycle could be about to do just that”.
It may be that you have not heard of PropertyMutual before today and that is a consequence of behaving as a legitimate mutual should - not locking our early adopters into long-term, restrictive and expensive contracts. We have not had millions to burn. The flip side of that is we have not had to de-mutualise, break any promises or principles nor sell the business to the Alternative Investment Market. We are working on platfrom enhancements as funding permits, but the UX and UI are relatively superficial in the context of PropertyMutual being the only business model that can take #collectiveaction - it would not take many members funding, owning and running us to add all the bells and whistles that modern consumers expect from a portal. Our profile has also not been helped by some elements of the free press refusing to run our press releases, or getting shot at for “advertising” whenever I leave comments. That is all to be expected, as portals have always been as emotive a subject as Brexit. I take no offence and it is to expected when you are going against the flow, so I have limited much of this comment to quoting from the report and our business model as transparently published on our website.
The only comment I make about PropertyMutual competitors, be they corporate businesses like Rightmove, Zoopla and Onthemarket, a so called “free” portal, or the latest subscriber based tech gimmick is that most, if not all, are either owned by external investors with an exit strategy; agent share ownership will always be diluted over time as shown by the record of Rightmove and Zoopla; and most if not all cannot claim to be 100% independent and free of any external investor influence. Most importantly, none of them are mutual. Mutuality, because of its 100% independence now and forever, is the only business model that is committed to working solely in the best interests of its members and thus perfectly suited to delivering collective action.
So, the next time your contract with any of the corporate and non-mutual portals is up for renewal, I suggest you consider subscribing to PropertyMutual. Our subscriptions are currently nominal, will ultimately rise based on member numbers but only to the lowest possible cost to deliver a competitive service by a not-for-profit mutual, and are transparent and published on our website. Our low subscription means you don’t have to come off Rightmove yet, but you can start adding your voice to the collective voice from the minute you subscribe. Ultimately, we aim to reduce subscriptions to zero as there is no point in negotiating "fee scales" with corporations that will always have to hike them back up to satisfy external investors.
Also, why not ask your current provider one or all of the following: will they build a Tech Stack for their members as directed by their members; are they 100% independent or do they have external investors or shareholders; are they offering equity inducements and if so, why do they need to; are they making you sign long term lock in contracts that would make other industries blush, and why do they need to; are they a member of Social Enterprise UK, committed to gifting up to 50% of any surplus to social causes; do they listen to, take note of and implement their members wishes; do they use the Electoral Reform Commission to ensure their members are balloted on key strategic issues (we came up with one firm, one member, one vote); do they have a charitable assignment clause guaranteeing they cannot be sold to profit founders and investors; do they have one fee for all and publicly publish their staged subscriptions, ethics and principles; do they monetise your data by allowing third parties access to it or instead, do they curate, silo and safeguard their members data in a mutual data lake to guarantee only members benefit financially from their own data?
We believe PropertyMutual works for both leading estate agent businesses, independents, and organisations like FIA and PropertyMark. They could be working with us to ensure that our collective action retains its independence and integrity. Although not-for-profit, PropertyMutual is structured to deliver not only a collective voice for the property industry, but a successful consumer facing business that can also distribute a potentially large surplus back to its members in accordance with their vote.
PropertyMutual can rapidly deliver “groupthink” and is qualified to drive “collective action” on behalf of property professionals. Most importantly, we will always listen to and be our members partner in business.
P.S. If you are interested in seeing the full Jefferies report, which is also a technical analysis of the UK portal sector, please contact me.
A version of this article was posted in the comments section of Property Industry Eye at this link - https://propertyindustryeye.com/rightmoves-abusive-relationship-with-agents-has-broken-down-says-city-analyst/#comments
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