Shares in estate agent backed property listings site OnTheMarket (OTMP:AIM) were up 3.1% to 82.5p as it announced record traffic and leads in January.
Traffic to its site totalled 30m visits, up 28% year-on-year. This translated into a fresh monthly high for number of leads generated for its clients - which include estate agents, letting agents and housebuilders - the company has agreements with Barratt Developments (BDEV), Bellway (BWY) and Persimmon (PSN).
CHALLENGING THE NETWORK
In recent years Rightmove (RMV) has benefited from a network effect in this market, in other words its website has the most listings and is therefore the one which prospective property buyers will go to when looking for their next home.
This reinforces its position as a must-have product for estate agencies and generates significant pricing power when it comes to securing subscriptions from agencies.
However, there have been signs recently that the agents may be quailing at Rightmove’s increasing subscription costs, which now total more than £1,000 per month, with membership numbers falling.
NEED FOR PERSPECTIVE
OnTheMarket’s challenger status should be kept in perspective for now with visits to its sites at a fifth of the level of Rightmove’s and a significant number of agents listing on OnTheMarket under free, short-term introductory trial contracts.
Shore Capital analyst Roddy Davidson says: ‘We believe that OnTheMarket has a compelling opportunity to take share within the online property advertising market by: presenting itself as an attractively priced/culturally aligned listing partner (with the ability to offer equity participation); promoting its exclusive listing service; rolling out more new products; extending its brand awareness and; building its presence in the new homes space.’
