"Estate agents have been struggling for some time, but a spike in the number of property transactions falling through has clearly got Rightmove worried"
Rightmove and Zoopla have announced free and discounted fees to support the property market during the coronavirus epidemic.
Rightmove previously announced that certain customers could defer payments of up to £275 a month for six months, but is now offering a 75% discount to all customers for the next four months.
The move comes as the number of property transactions failing to complete rose and the firm anticipates changes to rental behaviour.
The decision is expected to hit Rightmove's revenues by £65-£75m in this financial year.
Zoopla is offering estate agents up to nine months of Zoopla usage for free to help mitigate the financial impact of coronavirus on agent businesses over the coming months.
The new fee structures are available to new and existing estate agent customers of 30 branches or less (which covers over 80% of the UK estate agency population), as well as overseas and commercial agents.
Agents can choose three or nine months of portal usage entirely free, returning to normal fee levels thereafter, as part of an 18 month contract that follows the free term.
Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: “On some levels Rightmove is perfectly placed to ride the coronavirus storm – it’s high margin, capital light, cash generative and debt free. Unfortunately the same cannot be said for its customers.
"Estate agents have been struggling for some time, but a spike in the number of property transactions falling through has clearly got Rightmove worried and it’s taken the decision to sacrifice profits in the short term to help customers keep their heads above water. That’s sensible, but whether it will be enough remains to be seen.
"In the long term a strong balance sheet should mean Rightmove’s well placed to weather a downturn, but if the looming economic slowdown sees a shakeout in estate agency that could have permanent consequences for revenue and profits.”
Charlie Bryant, CEO, Zoopla, commented: “We have said consistently that agents are at the heart of everything we do, and today’s actions demonstrate the role we can play in helping to secure the long-term success of our agent partners. It’s our aim to support and work alongside agents to unlock new opportunities, deliver the utmost value for money, and to bolster them during this difficult period.
“This isn’t something we wanted to rush; we have taken the time to speak to our customers to get these options right for them. We know each agent is different, which is why we have two compelling offers available. Both options are simple, concise, and there are no hidden clauses. Available to new and existing customers, we hope that they provide a financial cushion for agents that alleviates pain points and meets their respective needs.
“Following the raft of investments made across the business, in product and technology, customer success, and in recruiting a highly skilled workforce, we are confident that Zoopla is the best marketing solution for agents. Without doubt, now is the time for agents to make Zoopla their primary portal. We look forward to working with the industry throughout this challenging time, and to playing a key role in helping our agent partners to grow in the months and years ahead.”