Estate agents accuse Rightmove of charging excessive fees

Estate agents are raising concerns over what they characterize as "unsustainable" fees charged by Rightmove, claiming that in some cases, these expenses have more than doubled over recent years.

The online property portal is facing a class action lawsuit initiated by accountant Jeremy Newman, representing a group of potentially hundreds of estate agents.

According to BBC sources, a letter of claim has been dispatched to Rightmove, seeking nearly £1.5 billion in damages. The assertion is that the company has "abused a dominant position" within the online property portal sector.

In response, Rightmove has described the claim as "without merit" and expressed its commitment to contesting it vigorously. The company asserts it remains "confident in the value we provide to our partners and consumers."

The lawsuit claims that Rightmove has imposed excessive and unfair subscription fees on thousands of estate agents and new home developers, leading to the filing of the action in the Competition Appeal Tribunal.

Newman indicates that numerous estate agents have reported increased fees with minimal changes in the services they receive, all while facing pressure from stagnating property prices.

"Estate agents are compelled to reduce their workforce because they cannot sustain the costs of employing staff alongside their fees to Rightmove," remarked Newman, who has previously served as a panel member for the Competition and Markets Authority (CMA). "Consequently, the effectiveness of their services is compromised."

Rightmove has consistently boasted a profit margin around 70%, positioning it as one of the most profitable entities within the FTSE 100.

The company's consumer research indicates it holds an 80% share of the time spent on property portals.

Newman emphasized that the class action does not argue for the elimination of Rightmove, acknowledging the portal's significant function within the property market. However, he contended, "Rightmove is exploiting a self-evident dominant market position and charging excessively for it."

The BBC reviewed evidence from five estate agents suggesting significant fee increases. Many other agents acknowledge that while Rightmove is considerably more expensive than competing platforms, it is responsible for the majority of their leads. They express difficulty in managing these costs yet feel they have little alternative.

Rightmove's website states that it provides agents with "access and brand exposure to the UK's largest and most engaged home-moving audience."

A spokesperson for Rightmove reiterated the company's confidence in the value it provides to partners and consumers, underscoring that these stakeholders are central to its business solutions and digital platform.

"As one of the most efficient segments of the UK housing market, we facilitate home movements by connecting buyers, sellers, renters, landlords, and agents. Our platform continually offers an expanding array of evolving products and features that enhance market transparency, liquidity, and confidence."

Alisa Zotimova, founder of AZ Real Estate, a bespoke property consultancy and estate agency based in London, reported a more than doubling of her fees over seven years. She initiated her business with a promotional rate, which has since escalated significantly. While the fee increases were "no secret," she described them as "unsustainable."

"You aren't obliged to sign up, but I feel cornered because my clients expect me to use it," she expressed. Zotimova warned that if smaller agencies can't afford these fees, it could have repercussions for the housing market.

"For buyers, sellers, tenants, and landlords, this could result in higher fees and a reduction in agent options if smaller firms are unable to compete," she noted. Upon learning of the legal action, Zotimova opted to participate, stating, "It feels somewhat like David and Goliath, but now there appears to be hope."

Chris, who owns two estate agencies in Northamptonshire, indicated he pays over £5,000 each month for basic membership, enabling him to list 30-50 properties online. He noted that this amount equates to the salaries of two full-time staff members per month. "It's a significant financial burden to manage each month," he remarked, emphasizing that these costs ultimately transfer to clients.

"Operating a small business while one particular company maintains complete control presents a considerable challenge," Chris stated. Although he recognizes Rightmove as the "leading portal," he believes costs should not be dictated by the firm.

"We continually need to cut back and make savings in other aspects to accommodate the behemoth that is Rightmove," he added.

Meanwhile, Andy Keogh, an estate agent from the Midlands, contends that Rightmove offers "value for money." He highlights that 80% of his leads originate from the platform, which he describes as having a "monopoly on the market." Starting June, his fees will rise from £1,710 to £1,850 monthly for a listing of up to 40 properties in sales and lettings. "If you find it unappealing, don't use them. Agents who complain would find it challenging to run their businesses without the platform," Keogh said. He acknowledged that for lettings, Zoopla provides a more cost-effective alternative, charging between £450 and £500 monthly.