RE: Is this a serious business?23 Feb 2023 17:05
grant...I have done a bit of research on this and I think OTMP had a chance, a really chance of making it, once upon a time…
They were initially formed by a mutual association of agents in 2015 to take on Rightmove, to break their monopoly. OTMP imposed an illegitimate 'one other portal' rule (mistake one), which they have since had to ditch, it was found at tribunal to be anti-competitive . This meant agents could initially only advertise their properties on one other portal, namely Rightmove or Zoopla. Regrettably, the agents involved rather bottled it and instead of taking on their principle target, they collectively decided to remove listings from Zoopla (mistake No. 2). All this did was to strengthen Rightmove’s position, as the only viable portal known to the public.
They spectacularly failed to achieve what they set out to do, and actually made the situation much worse for themselves. When OTMP first launched Rightmove’s SP was 207p, today it is 564p, and agents have never paid the portal more than they currently do! In fact, the best thing an investor could have done when OTM launched was buy shares in their main competitor, the one they were trying to get rid of!
This whole outcome really does render the current business as pointless, from everyone’s point of view. The last thing agents wanted was a third portal and that is exactly what they have ended up with. And, in reply to your point, no, OTM does not offer agents 'fantastic value', it only presents an extra cost to them, as they are still all on Rightmove, which they will now never ditch, otherwise they would have done so when they had the chance.
The problem is estate agency is a cottage industry with everyone running their own little business, and although some are probably very good at what they do, they generally are not business minded people. They have been lead into this like sheep, and it’s been a complete disaster from almost every angle.
Other than the lack of a real place in the market for this business, my other concern is that agents have been handed out tranches of shares for signing up (mistake No.3). The first issue with is, is the constant dilution of shares taking place, it would put any serious investor off.
The other issue is agents have had restrictions from selling these free shares imposed on them, for a period. Once this time elapses, I fear they will be selling them in the hoards. The shares owe them nothing and many will just cash in when the first opportunity presents.
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