Rightmove has offered a 75 per cent discount to the fee it charges estate agents who use its online portal, due to the shut down of the housing market
Property portal Rightmove said it stands to lose a further £20m in revenue by extending its discounted estate agent fee until September.
Since April, Rightmove has offered a 75 per cent discount to the fee it charges estate agents who use its online portal, due to the shut down of the housing market.
The firm said it plans to continue offering a discount until September to give agents time to rebuild their pipeline of business, but it has tapered back its relief package.
The firm offered the original discount to help estate agents with their cash flows during the lockdown of the property market due to Covid-19.
From August, estate agents in England will be offered a 60 per discount which reduces to 40 per cent in September.
Because the Welsh and Scottish property markets are only now beginning to open, Rightmove will continue to offer the 75 per cent discount for August before dropping the discount to 60 per cent in September.
Rightmove’s revenues fell by between £65m and £75m as a result of the discount it offered between April and July. The property firm expects its takings to drop by a further £17m to £20m due to the extended package of relief.
In a statement to the London Stock Exchange ahead of its closed period the firm said: Despite the positive consumer reaction to the re-opening of the housing market, it takes three months on average for housing transactions to complete which impacts the cash flows of our agents.
“It will also take time for agents to build a pipeline of vendors and new sales instructions.”
“Given this, we have today communicated our continued support to our agency customers in England by offering a 60 per cent discount for August and 40 per cent for September.”
The firm’s shares dropped 0.8 per cent on the news of the extension.
Emilie Stevens, equity analyst at Hargreaves Lansdown, said: Like other retailers closed over lockdown, the reopening of the property market has been met with pent up demand.
If Rightmove could have a queue at the door it would. The number of sales agreed is up 10 per cent on last year and the group’s platform has seen its busiest days ever. But beyond the flurry of initial activity is bleaker news. Agencies are clearly struggling, even with a 75 per cent discount 650 have disappeared from the platform since the start of the year and Rightmove is now extending its financial lifeline to August and September. That’ll help for now but it’s likely to be just kicking the can down the road – future Rightmove’s problem, Emilie said.
A campaign group, Say No to Rightmove, has been urging estate agents to leave the property giant’s portal over the firm’s refusal to support businesses by offering a complete suspension of fees during the lockdown period.