Estate agents accuse Rightmove of charging excessive fees

Estate agents accuse Rightmove of charging excessive fees
Estate agents have accused Rightmove of charging "unsustainable" fees, with some saying their charges have more than doubled in recent years.
The online listing portal is now being pursued in a class action, launched by accountant Jeremy Newman on behalf of potentially hundreds of estate agents.
The BBC understands a letter of claim has been sent to Rightmove seeking just under £1.5bn in damages, claiming the website has "abused a dominant position" in the online property portal market.
Rightmove said the claim was "without merit, and we will defend it vigorously", adding it is "confident in the value we provide to our partners and consumers."
The claim alleges that Rightmove has charged thousands of estate agents and new home developers excessive and unfair subscription fees, and action has been filed in the Competition Appeal Tribunal.
Newman claims hundreds of estate agents are reporting a rise in fees with little change in the services they are receiving while they have been "squeezed" over the past few years by flat property prices.
"Estate agents are having to employ fewer people because they can't afford them alongside their fees to Rightmove," said Newman, who is also a former Competition and Markets Authority (CMA) panel member. "As a result, their services can't be as effective."
'Charging too much'
Rightmove has consistently reported a profit margin of around 70%, making it one of the most profitable companies in the FTSE 100.
The company's own consumer research suggests it has an 80% share of time spent on property portals.
Newman said the class action was not about arguing Rightmove should not exist, as it has "an important function in the property market".
But he added: "Rightmove is exploiting a self-evident dominant market position, and are charging too much for it."
The BBC has reviewed evidence from five estate agents suggesting there have been sharp rises in fees.
Many other agents report that Rightmove is significantly more expensive than other platforms, yet acknowledge it delivers most of their leads.
Many say they are struggling to absorb the costs but feel they have little choice.
On its website, Rightmove claims it gives agents "access and brand exposure to the UK's largest and most engaged home-moving audience."
A Rightmove spokesperson said the firm was "confident in the value we provide to our partners and consumers, who are at the core of our business solutions and digital platform."
"As one of the most efficient parts of the UK housing market, we help people across the UK to move home by bringing buyers, sellers, renters, landlords and agents together.
"Our platform continues to provide a growing range of constantly evolving products and features which facilitate market transparency, liquidity and confidence."
'It's like David and Goliath'
Alisa Zotimova is founder of AZ Real Estate, a London-based Bespoke Property Consultants and Estate Agents.
Zotimova said her fees have "more than doubled" in seven years.
She started with a reduced promotional rate which later increased significantly.
Whilst this was "no secret", she described this rise as "unsustainable".
"You don't have to sign up but it feels like I'm pushed into a bit of a corner with my customers expecting me to use it," she said.
If smaller agents cannot afford these sorts of fees, Zotimova said that would have knock-on effects for the housing market.
"For buyers, sellers, tenants and landlords there will be higher fees, less choice of agents if smaller ones can't compete," she said.
When Zotimova heard about the legal action she decided she didn't want to opt out.
"It feels a bit David and Goliath, now it seems there is maybe a chance," she said.
'I'm charged over £5,000 a month'
Chris, who owns two estate agents in Northamptonshire, is being charged more than £5000 a month for a basic membership, allowing him to advertise about 30-50 properties online.
He says his fees are the equivalent of two full time members of staff salaries per month.
"It's a lot of money to find every single month," he said, adding that the costs ultimately get passed on to clients.
"When you're trying to run and operate a small business and a particular company has complete control of that business, is a challenge," Chris said.
He accepts Rightmove is the "number one portal" but said costs shouldn't be determined by the company.
"We just have to continue to cut back and make savings in other areas to facilitate the juggernaut that is Rightmove," he said.
'Value for money'
Andy Keogh, an estate agent in the Midlands, believes the platform gives "value for money". He said 80% of his leads come from Rightmove which has a "monopoly on the market".
From June, his fees will go up from £1710 to £1850 a month, for up to 40 properties in sales and lettings.
"If you don't like it, don't use them. Agents who are moaning would struggle with their business if they decided to come off it," Keogh said.
He acknowledged that for lettings, Zoopla is much cheaper, which charges £450-500 a month.