After 25 years dominating the UK house sales and letting listing market, the writing may be on the wall for Rightmove as new AI entrants seek to shake up the marketplace.
Background
During the 20th century, if you wanted to buy or rent property you looked in agents windows and you read the classifieds in your local paper.
That all changed in 2000 when Countrywide, Connells, Halifax and Royal & Sun Alliance joined forces to create Rightmove. Initially free, it revolutionised property search in the same way that Amazon changed the retail landscape and it can be argued that the death of classified advertising in local newspapers owes more to Rightmove than Google and other online advertisers.
Charging for the service was introduced in 2002 and has risen steadily – today a small letting agent with a single office can expect to pay £1,000 per month to be able to use Rightmove. There is a cheaper option in the form of more informative but much popular rival, Zoopla, which started in 2008 based on Rightmove's success (it was started by the team which also started LoveFilm – remember that?). - but when Rightmove is the 800 pound gorilla in the market, it is almost impossible for any challengers to take any share from them.
Whereas Rightmove is a necessity for estate agents selling properties, there are a few towns where letting agents have collected together and agreed that none of them will use Rightmove which apparently is the only way to successfully move away from using the product and to stay in business.
What Changed?
Having the largest database of properties available for sale or rent in the country plus an app or web tool which allows users to search by price or number of rooms or location has given Rightmove and Zoopla an unassailable advantage which new entrants will struggle to compete with, but when it comes to the letting market there is a personal aspect which these established players cannot handle.
For the prospective tenant who applies for everything in his or her price range and who consistently does not even get a viewing or the agent or for the landlord who spends hours (and significant sums) referencing potential tenants in an attempt to select the one candidate with the greatest likelihood of looking after the property and paying the bills promptly and on time, there is a need which is not currently addressed.
Imagine an AI based tool which shows a prospective tenant those properties which are in his or her price range and which, based on their personal circumstances and financial history, would be available to them. Imagine a landlord with a property to let, asking for a tenant able to pay the requested rent with a referencing screen of 80% or some other specific number that meets his or her criteria.
Not only would this be the death knell for Rightmove and Zoopla, assuming the new tool could be used at lower cost than the incumbents, but with the addition of property and tenant specific rental agreements and payment management, it could also be the death knell of letting agents too.
Does such a tool exist? Letting and estate agents can breathe a sigh of relief because the answer today, is NO.
However, the seeds of a solution are appearing, for example Rentberry is a US developed AI application now available in 60 countries including the UK. At present, only US based users can use the referencing or payments elements of the app and insurance is also focussed on American users, but whether it is this app or some future alternative – imagine being able to find properties available based on your preference AND your personal circumstances, being able to book a viewing of any matches and then, for the landlord, to be able to automate contracting, rent collection, insurance and much else as part of the process.
What Next?
It depends who does what with whom. For AI to work well, it needs lots of information from which it get detect patterns and thus mimic intelligence. For an app like Rentberry to succeed in the UK, the obvious source of data is that held by Rightmove or Zoopla, so an alliance, merger or takeover would give UK users immediate access to the app – but what would be the benefit? Unless it can provide referencing of potential tenants or additional services to establish and manage a tenancy, the added value will be small – so a link with Experian or PIMS might be a better place to start or as a front end to a tenant/property management tool such as the NRLA'sSAFE2 might make more sense.
There are many other AI solutions out there, TenantCloud is a property management system that automates rental related tasks and IBM's TRIRIGA provides AI based workspace optimisation for property management companies as does Notion. Add LetHub and Forward to the list and you can see there are many options out there even before you start looking at related apps which are not property focussed but which can be used in this space – think Scribe, Grammarly and Asana to name just three.
The issue for most of these apps are that they use generative AI which focusses on creating content, such as text, images or code. What we see little of today but which will be the change that really turbocharges take up, is agentic AI – that is apps or agents which are designed to act autonomously, making decisions and executing tasks with minimal human intervention.
So today, you have AI and non-AI tools which simplify what you do – from whittling down a list of potential tenants to highlighting who has not paid their rent, but there are few which do what your letting agent would do on your behalf if you employed one. It can be argued that some of the non-AI tools out there go some way to doing this, but the issue is you have to modify your processes and way of operating to fit with whatever the application designer coded when he specified the application – it will not learn from you and operate the way you would if you were instigating all of the actions. This may be ideal for a 'newbie' landlord who needs handholding and reminding of what he or she needs to do, but for experienced property professionals who have developed a business and operate it in a manner which best meets their objectives, being forced to change to fit some property technology is often one step too many.
Just think how many properties you could manage with a good agentic AI solution. And when will it happen? To answer that, I suggest you look to China. Whereas the western world has spent most of this century protecting old industries, most Chinese investment has been focussed on the future – Chinese EV's are arguably better technology than their western counterparts and BYD just overtook Tesla as the largest producer of EV's worldwide. In the property space, Butler, originally a housekeeping service, has evolved into an AI-powered building management system used by major property developers in Hong Kong. It integrates AI for tenant enquiries, defect reporting and facility management whereas elsewhere in China there are at least 23 AI companies specialising in this area including LifeSmart, R&B Technology, Homi, Carnot Innovations and Ai Property Management – so the future may arrive much sooner than you think and it may be a tool to help you improve your business or it may be a Chinese competitor – you decide…