Charging fee for listing property in cyberspace sparks row

There is a little-publicised but highly-important battle about to start in the UK's property industry that could have international repercussions – and it's on and about the internet.

Rightmove, Europe's largest online portal listing residential property for sale, has just started charging realtors for listing their properties. In some cases the fee is £495 or over $920 per office per month – a hefty sum for an industry which has seen a 50 per cent downturn in business in just six months. Some say this is foolhardy just as estate agents face continuing low sales and commission, but Rightmove's bad timing is even worse than that.

The National Association of Estate Agents, an umbrella body representing about half of the country's realtors, is about to establish a free-to-advertise site that threatens to poach business from Rightmove. The result, within the UK, has been sharply critical publicity about the once-respected website within the property world. Rightmove has already admitted that its retention rate for clients – that is, the proportion of realtors who keep using the site to advertise – has slipped from an average of 92 per cent to 85 per cent. Now its share price is down 10 per cent.

Some observers believe Rightmove will back down and sharply reduce or even scrap charges before the Naea site launches in October; others believe Rightmove will keep the charges but lose a vast share of its client-base to the Naea by the end of 2008. Either way, it seems to damage the viability of the business model used by Rightmove and copied by other realty sites in Europe and North America. Watch this space…