Did you hear the story of the estate agency boss who cancelled his Rightmove contract and awoke the next morning to find a horse’s head in his bed?
That didn’t really happen, not yet anyway. But read on because your favourite property portal has just issued a trading statement and it got me thinking.
We all know what ‘..an offer he can’t refuse’ means. It’s a proposition that you can’t say no to out of fear. In the gangster sense it’s a fait accompli whereby if you don’t toe the line you might end up without a leg to stand on. Literally.
One of the most lucrative tools in the gangster toolbox is the protection racket. A new shop or business opens in a neighbourhood and soon it is visited by someone very assertive in a suit. This ‘representative’ says to the new business that there is an unavoidable cost to operating and that if they wish to thrive, indeed to survive unhurt, that a levy must be paid.
You simply cannot do without them – not if you know what’s good for you.
The levy is collected regularly and then inevitably frequently increases in cost to the point that the business finds it more and more difficult to get by. But the men in suits are unfazed regardless of how tough it is to trade – they are offering you something that you cannot refuse. Payment for protection from a sudden loss of your ability to trade, so to speak.
On Monday this week Rightmove announced its latest trading update and for them at least it looks bellissimo.
Revenue this year is on track to increase by 10% over last year and operating profit has grown by a similar percentage. In 2023 revenues were £332m and profit was £245m. ARPA, the amount of money that it takes from agents and house builders, is on target to rise from £1,314 to £1,430 per month collected.
In contrast, sales transactions in the UK property market are down by about 20% on recent levels. HMRC states that September completions were 19% lower than in September 2022. In estate agency terms that’s a reduction of about £600 million in fees earned – or around £24,000 per UK branch office.
All the while, Rightmove are squeezing the blood from the stone ever harder and now make more profit each year than the top 10 largest estate agencies in Britain combined.
As a Rightmove customer this might shock and concern you. But wait, it gets worse. Much worse…
In this week’s trading update as published via the London Stock Exchange Johan Svanstrom, Rightmove’s CEO, also laid out plans that he says he’ll deliver by 2028.
Here are the numbers he presented to the City:
So that’s an increase in revenue of 81% and an increase in profit of 71% in just five years (already their net profit is 73% of turnover) which means, logically, that by 2028 Rightmove expect to be charging you an additional £1,158 each month, a total of £2,588 in order to hit target.
Can you afford this extortionate increase? And can Rightmove justify it other than to appeal to the mob mentality of their shareholders?
But the bigger question is this… if the answer to the above is ‘no’, will you have the cojones to stand up to the Milton Keynes Mafia or will you just continue to let them push you around?
I’m all for companies making profits in a free market. But every now and again along comes a powerful monopoly that abuses its position and holds people to ransom unfairly.
Note: At the end of most gangster movies the out of control bad guy normally gets whacked, replaced by a younger more sensible version that can be better tolerated.
Rightmove might seem invincible – but even Al Capone got caught eventually.
Russell Quirk is a frequent media commentator on the property market and politics and is co-founder of ProperPR, the specialist public relations agency.
