Are online letting agents transforming the market or just niche players?

Last August I wrote asking whether 2014 was the year that online letting agents would outgrow their high street counterparts.

Background

I'd like to revisit the numbers and see whether much has changed in almost a year. 

But first, it's important to understand who the customer is: DIY Landlords.

That's right, tenants are not the customer, and neither are Absentee Landlords (you know, the ones who have a day job or live abroad).

There are no stats on what % of landlords are DIY (self-managing) and how many are Absentee.

We'll ignore Spareroom and Gumtree for the purposes of this research, even though the volume is significant. We can't figure out how many DIY Landlords use a combination of Spareroom/Gumtree and Rightmove, and how many just use the free-to-list services offered by Spareroom and Gumtree.

Last year (2014)

We looked at the number of live listings on Rightmove (with Zoopla numbers in brackets).

Upad - 764 (574)
OpenRent - 400 (685)
Visum - 329 (219)
Urban Sales & Lettings - 296 (298)
Makeurmove - 190 (184)
Rentify - 179 (609)
Discount Letting - 94
Lettingaproperty.com - 73
The Online Letting Agents - 70
I Am The Agent - 60
Rented Online - 34
Wise Moves - 31
House Network - 27
Mirus Property - 21
National Lettings - 17
Lets-Rent - 9
Pink Residential - 1

It was odd that these 'tech agents' all had a different number of listings on the two portals. Daz Bradbury, of OpenRent, has since elaborated saying that Rightmove is more expensive, so they try to let without Rightmove before posting a larger volume of listings on the major portal.

So in the 10 months since this research was conducted, has there been much growth in the use of online letting agency?

The results

We have focused on just Rightmove, as Zoopla is now increasingly becoming irrelevant. We've also ignored most new agencies, as they haven't made a dent in the lead held by OpenRent and Upad. Only EasyProperty has gained sufficient volume to put it into 3rd place. For all agents, change from August 2014 in brackets.

Upad 785 (+21)
OpenRent 661 (+261)
Visum 290 (-39)
Urban.co.uk* 358 (-34)
Makeurmove 162 (-28)
Rentify 225 (+46)
Lettingaproperty.com 80 (+7)
The Online Letting Agents 93 (+23)
I Am The Agent 72 (+12)

EasyProperty - 390

*Urban Sales & Lettings acquired Discount Letting and rebranded to Urban.co.uk

So apart from OpenRent and EasyProperty, there isn't any evidence of explosive growth or market change.

By far the most disappointing is Rentify, which was recently featured in Wired in an article titled How technology could kill off high street letting agents. While the premise of the article could very well be true, as many DIY Landlords do operate without the use of a high street agent, it won't be Rentify or any of the above that kill off traditional/expensive agency.

Why won't any of these agents kill off or disrupt traditional agents? They aren't adding value. 

In the Wired article, George Spencer grumbles about a bad experience with agents. Rentify, with its £7m of VC funding, isn't offering anything new, different or exciting. And the evidence is with its constant business model pivots. The company spends money acquiring DIY landlords and then tries to upsell them to a managed service for 4%. This was 8%, but I guess there wasn't much demand from landlords Rentify attracts, who tend to self-manage.

It's nice having the luxury of dumb VC money allowing you to fumble your way to a viable business. Where are the announcements of seriously cool tech or innovation? We're still waiting for an OpenDoor style revolution in the UK.

 

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