Rightmove PLC (LSE:RMV) and OpenRent’s split will provide a useful test case for how letting agents fare by not listing properties on the portal, analysts say.
Having failed to agree on contract terms, Rightmove confirmed the letting agent’s departure, alongside its roughly 8% share of listings, from the site on Tuesday.
Rightmove moved to reassure full-year guidance would not be impacted by the breakup, adding it remained the largest portal for rental properties in the UK regardless.
However, Panmure Liberum analysts suggested OpenRent’s move to go at it alone without Rightmove could prove an interesting case study for peers.
“One argument frequently trotted out is that agents struggle to win instructions if they do not advertise on Rightmove,” analysts said.
“OpenRent will now serve as a good test case for this.”
The rift between Rightmove and OpenRent reportedly came as the former worked to up fees for some third-party property agents and platforms that use its site.
“It’s a clear signal that the once-dominant property portal is flexing its monopolistic muscle, demanding terms so onerous that even the UK’s largest online letting agent felt compelled to walk,” Mike Nettleton, founder of property customer management firm Agent Response commented previously.
Whether OpenRent’s decision to leave Rightmove prompts food for thought for other similarly-placed letting agents remains to be seen.
Indeed, “it’s important to note OpenRent’s positioning in the market as an ultra-low-cost ‘do most of it yourself’ approach to lettings, so likely this helps them maintain their value proposition to landlords,” Panmure said.
OpenRent’s current absence from Rightmove rival OnTheMarket means the move is unlikely to spell “a broader competition-related weakening in the pricing environment” as it stands though, analysts added.
UBS forecast the loss of OpenRent from its platform would cause a £1 million hit to Rightmove’s revenue this year, stretching to £3 million in 2024.
Though “largely immaterial,” UBS also cut Rightmove’s valuation, setting a new price target of 760p, against 782p previously.
Whether Rightmove can claw back the listings lost from OpenRent now appears in view, UBS highlighted.
Rightmove fell 4.9% to 521.40p on Tuesday.