by Alex Catalano
Estate agents who band together and agree to restrict their advertising to one newspaper may be acting illegally, according to the Office of Fair Trading.
The OFT was asked to investigate the case of a group of estate agents in Solihull who formed a consortium to produce their own property advertising newspaper, boycotting the local Solihull News.
The publishers of the Solihull News, the Birmingham Post and Mail, and the Newspaper Society had complained to the OFT about the agents’ agreement.
“There were two obvious adverse effects from the estate agents’ agreement that they would only use their own property newspaper,” said Sir Gordon Borrie, Director General of Fair Trading.
“Firstly, it prevented free and fair competition for property advertising; secondly, a householder in the area would, if he used one of the estate agents in the agreement, be persuaded not to have the house he was selling advertised in other local papers and this might cut down the number of potential buyers attracted to the property.”
According to Charles Smallwood of Shipways, a member of the consortium, the agents’ decision to set up their own free paper about two years ago was sparked off by the rising cost of advertising.
“At that time the Solihull News was the only local paper. Not only were we being held to ransom on costs, but their attitude was unhelpful,” says Charles Smallwood.
The agents’ freesheet was originally produced as a weekly property guide. It has now expanded to a free daily newspaper, the Solihull Times, published by Reed International.
Following pressure from the OFT, the consortium changed the terms of its agreement, dropping its restriction on advertising elsewhere. However, the OFT says it intends to “monitor the situation closely”. And the Newspaper Society also indicated that it would be keeping an eye on Solihull to see if the agents’ advertising practice changes.
“Purely from a personal viewpoint, I have no intention of advertising in both media,” says Charles Smallwood. “It’s a waste of money. If it’s commercially in the client’s best interest, then fine. But dual advertising means dual costs.
“I can assure you there is no restriction on us now, but that won’t stop the OFT from believing we don’t have an agreement,” he says. “They don’t seem to work with a commercial mind, only a legal one”.
Solihull is not the only city where disgruntled estate agents have abandoned their traditional papers. Last week, the Sheffield Morning Telegraph, England’s oldest daily provincial newspaper, announced that it was closing after local agents failed to renew their annual advertising contracts.
And last year, the Coventry Evening Telegraph also saw local agents switch en masse to a local freesheet. “Altogether, 25 of us were putting in 20 pages per week of paid advertising at around £800 per page”, says John Kenney of Shipways’ Coventry office, “but it was taken for granted.
“We were offered a good deal by the Coventry Weekly News, a free paper, and the property guide quickly established itself as the number one.”
The Coventry Times, however, fought back. Not only did the paper drop its advertising rates to agents, but it also threatened to set up its own property shop, operating from High Street premises.
To date, seven of the 25 members of the consortium have been wooed back to the Coventry Times, which has just relaunched its weekly property guide.
“I’m pleased to have retrieved the situation and like to think it’s to our mutual benefit,” says Mike Young, the Coventry Times’ advertising manager. “My message would be to give agents service. Even now there are too many situations where nobody speaks to or sees the agents.
“Rates are a factor. Papers who are charging full rates, without giving discounts, perhaps ought to look at it again,” he says.
“Readers value the property service. We didn’t see a drop-off in circulation, but any paper that doesn’t offer it will lose business over the years.”
