Zoopla's return to growth still looks shaky

The online property site has a long way to go before it can claim to have seen off Onthemarket.

by Jack Torrance
Last Updated: 16 Feb 2016

Zoopla investors must have breathed a sigh of relief this morning as it announced it had returned to growth. Britain's second-largest property website has faced something of an existential crisis this year after the launch of estate agent-owned competitor Onthemarket.com, which planned to overtake Zoopla by the end of its first year but it appears to have retained the upper hand - for now.

Onthemarket, which only allows its members to advertise on one other portal (forcing them to drop Zoopla or Rightmove) made substantial early inroads, signing up more than 5,000 estate agent branches and causing the Zoopla to admit it had lost almost a quarter of its UK members in April. But things were looking up for the incumbent today as it said it had returned to growth, signing up a net 213 UK branches in the four months to July - taking its total agency members up to 12,556.

Read more: Time to show estate agents the door?

Cue a 2.8% jump in its share price (to 261.4p) and headlines saying it had fought off the threat of Onthemarket. 'We are very pleased that over the past few months of trading we have returned to growth in our number of UK Agency members,' said CEO Alex Chesterman. 'Our huge audience of property-interested consumers remains loyal and engaged and our members are enjoying strong performance and a competitive advantage in terms of both brand exposure and leads generated via our platform'

Zoopla has still got a lot of ground to make up though. Such a small net increase leaves it way down on the 16,261 members it had at the end of March 2014 and Onthemarket shows no sign of giving up. Just two weeks ago its chief executive Ian Springett penned an op-ed claiming he was confident the business was 'here to stay' and would develop a 'credible alternative to the market leaders'. He neglected to repeat his intention to overtake Zoopla by February, though.

Eking out a bit of growth at least shows Zoopla isn't on course to go the way of the dodo, but it needs to be vigilant about threats to its future – not least the emergence of online estate agents that could kills of its biggest customers. 

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