Ladies and gentlemen, thank you for standing by, and welcome to the Rightmove full year 2020 question answer conference call. At this time, all participants are in listen only mode. After the speaker introduction, there will be a question and answer session. To ask a question during the session, you will need to press star and one on your telephone. I must advise you that this conference is being recorded today, the 26th of February 2021. I would now like to hand the conference over to Mr Peter Brooks-Johnson, the CEO. Please go ahead, sir. Thank you, Roberto. Good morning, everyone. I'm joined this morning by Alison Dolan, our CFO, and Miles Shipside, our housing market expert. Hopefully, you've had a chance to see the presentation, but I thought I'd take a couple of minutes to start off with and give you a quick summary of all the words that you may have heard. 2020 was Rightmove's 20th birthday, and of course, there's not been a year like it in our history. COVID-19 has upended the lives of everyone in the U.K., and it's had a tragic impact on many people. From a Rightmove perspective, we've emerged stronger. The network effects of the heart of our business are stronger than ever, with record traffic and leads. Traffic in 2020 was over 30% higher than 2019. The trend continues into this year with a new record number of visits on the 17th of February, at 8.5 million visits in the day. That's all led to our market share of time, according to Comscore, nudging slightly higher. That traffic is turning into leads and sales for our customers. Leads last year were up over 27%. Quite remarkably, transactions, according to HMRC, were only down 11% on 2019. Despite the uncertainty around the end of the stamp duty holiday, home hunters continue to want to move. Our leading indicator of sales agreed for February 2021 is 20% higher than the 2019 number. Undoubtedly, 2020 was tough for our customers, and we offered both financial and practical support, as you know, both to help them in the short- term, but also to show empathy at a moment when our customers were hurting, which we know from past experience builds long-term goodwill. Despite the challenges, our branch-based agents were resilient, with only around 200 leaving the industry in the year, and branch numbers in total being positive in the second half, partly as multiple branches were unfrozen and new businesses started up, encouraged by the vibrant market. The number of new joiners in the second half of the year was the highest in any six-month period since the first half of 2015. Looking forward, I wouldn't want to get too carried away. The lack of available stock, and there is, of course, continuing macro worries. For clarity, I don't think the timing of the stamp duty holiday will have much impact on the number of transactions in 2021. I think we'll see a broadly similar branch numbers in 2021 in total. From a new homes perspective, I think the combination of the strong demand and relatively slow build rate due to COVID-safe protocols will see the numbers of new homes development listed fall a little from here. We're planning product-led ARPA growth in 2021 and expect the growth rate to be close to that of 2019. Over 1,000 agents have upgraded to Optimiser 2020 in the last year, and we've seen consistent sales in the second half of 2021. We've got off to a good start with around 60 upgrades in January. We've also made good progress with our strategic projects in 2020. Among other things, the ground-up rebuild of the property details page, which will enable more exciting products in 2021, we've delivered the first phase of the digital tenant journey. Finally, I'm delighted to say that after the pause in 2020, we've restarted our capital return program with a four-and-a-half P dividend today and share buybacks in March. That's it from me. Over to questions. Ladies and gentlemen, we now begin the question and answer session. As a reminder, if you wish to ask a question, please press star one on your telephone. We have the first question from the line, William Packer from Exane. Please go ahead. Your line is open. Hi there, it's Will Packer from Exane BNP Paribas. Thanks for taking my questions. Three from me, please. It's encouraging to see a rebound in agent numbers in the second half of the year, and your guide of flat agent numbers for 2021 suggests a stabilization after some weaker years. Could you talk about how you see the structural agency outlook? I suppose some would argue that consolidation is likely. Others would argue digital actually reduces barriers to entry, you could see an acceleration in estate agency formation as the market recovers. Just first question, a comment on that dynamic. Secondly, more specifically, does your guidance include any negative impact from consolidation with Countrywide? Final question from me is, Boomin published a pretty aggressive email this morning calling you overpriced and not innovative. Could you update us where we are on their launch process and what they're doing differently? How many agents have they signed up? Is there any product differentiation? Thanks very much. Thanks, Will. Starting off with sort of my view on structural outlook for agency, I would hope I'm being pretty consistent when I say what we're going to see, and I totally accept that from the outside of the industry, it's a little harder to see. What we're going to see is a continued process where at the very large end, I think we'll see a little bit more consolidation. I'm interested, as I'm sure you are, but we've seen rumors of a few deals in the last few weeks. What's fascinating is it seems to be, on the whole, it seems to be people looking to buy into the industry, which I think suggests that there's some real positivity about agency for the future. At the bottom end, sorry, I shouldn't really say bottom end. At the smaller end, what we see is continued fragmentation. What's fascinating in those numbers of branches that joined us in the second half was around that 50% of them were entirely new businesses, and they're small. These new businesses are small, two, three-person businesses. At the moment, what we're seeing, as I noticed in the presentation, is sadly, around about 50% of them don't survive their first six months, which I think is probably pretty usual for SMEs. Obviously, as the market gets better, that ratio will improve. I think we're set for digitization to continue to allow you to operate at a smaller level. Interestingly, one of the guys who used to work at Rightmove left a couple of years ago to set up his own agency in Essex. He's a great test case for us. His argument was, "I've been telling agents all these years what to do, I'm going to go and prove that I can do it myself." What he's done, actually, he set up on his own, using entirely digital methods, and opened a small branch because he said it was a projection of confidence. In the last half, he's actually recruited two more people because he couldn't keep up with the work himself. Now, I wouldn't want to say that John is every agent, and obviously, I've got a soft spot for him because he was a good employee. I think that sort of shows the direction of travel. I think we'll see more of these very small because they can be nimble. Yeah, hopefully, I'm being consistent. I think in the medium- term, we'll still see branch numbers rise in total. Talk about Boomin. Boomin, latest information we have is that Boomin is possibly going to launch second half of March, would be my best guess. In terms of agent branch sign-ups, not sure. Don't have a number to hand. I think I would probably conservatively suggest they should do quite well signing up agents, because at the moment it's zero cost, zero commitment. As an agent, why wouldn't you? I would expect, I think we should expect that number to be reasonable. I think as ever, thinking about competition, the real challenge for a portal of any sort is actually getting consumers to come to your website. Over 80% of our traffic actually is brand led. 80% of our traffic comes to Rightmove, because people have either typed Rightmove directly into their browser or typed Rightmove into Google. You have to offer something different to attract that traffic to your portal. I think Boomin are taking quite a different approach at the outset. It appears, again, I'm only going on what I've read, which will be the same as that that you've read. It appears that what they're trying to do is talk about sort of everything to do with the home, whether that be whether this sofa will fit in my living room or whether my energy bill can be reduced. If you like, it's sort of a bit of Rightmove, a bit of Pinterest, and a bit of MoneySuperMarket and uSwitch sort of blended together. It's a really interesting approach. I tend to believe the internet prefers specialists, and consumers will come for a really clean experience around a refocused topic. As ever, yeah, we'll watch carefully and we'll see what they launch. Thanks, Peter. A very useful color. Could I just follow up, and use this as a segue just to hear your latest thoughts on the wider competitive backdrop? Zoopla obviously launched a pretty aggressive price point or went free for a while. Have they reverted to normal pricing now? Where OnTheMarket in their pricing and are you seeing any big shifts in agents among your peers? Thanks. Yeah. As far as I know, Zoopla have now returned to normal pricing. No particular big shifts. You're right, Will, for those of you who don't remember, Zoopla offered two deals, six months free for an agent if they signed up for, I think it was a 24-month contract. Nine months free if an agent left Rightmove and you signed up for a 32-month contract, from memory. You can see the impact of that in our numbers. In terms of OnTheMarket, I think what we've seen there is OnTheMarket have become rational and have really started cutting back on the free deals they were offering people. You can see that their branch numbers have fallen recently as they've asked people to pay, which I think makes loads of sense. Broadly speaking, seeing through the noise, actually competitive dynamic doesn't feel terribly different to this time last year. Thanks, Peter. Useful color. You're welcome. Thank you for your question. We have the next question from the line of Adam Berlin from UBS. Please go ahead. Your line is open. Hi. Good morning, Peter. Welcome, Alison. Three questions from me. The first question I want to ask is, all the demand indicators you talked about in terms of housing transactions, house prices, agency commissions, all going in the right direction. Why have you been a bit cautious on pricing this year and guiding for kind of output growth below 2019 levels in such a strong market? just if you could explain your thinking around that'd be really helpful. Second thing is, I wanted to ask you about what Scout24 are doing in terms of a consumer subscription model focused on tenancy initially. You're obviously not going down that path. You're giving away the tenancy passport for free, hoping to generate efficiencies. Why did you not think you could charge consumers in the same way that Scout24 is doing? That program seems to be getting quite a lot of traction in Germany. The third question I wanted to ask you was about something you didn't talk so much about in your presentation, which is about other lead gen you might be able to do in terms of mortgages and broadband and other things that was talked about more in the note this morning. How are you thinking about those issues? What progress have you made, and will we see any revenue impact in 2021, 2022 from those initiatives? Thanks, Adam. Let's talk about ARPA first. I think it's easy to walk past the fact there's still a lot of uncertainty in the macro economy. I think we're all on a sort of vaccine high, but there is still uncertainty. When we were thinking about pricing for 2021, that uncertainty was certainly forefront of mind. We could have led with price this year, but we chose to lead with products for a few reasons. Firstly, product upsell tends to pick up sooner, and it picks up as soon as agents feel confident about their marketplace. You can see from our numbers in the second half of 2020, we think that focusing on product will see confident agents increase spend more quickly than we would do with a sort of normal pricing round. Secondly, we built a lot of goodwill in the second half of last year, certainly our sentiment indicators would show that. We want to be empathetic to our customers. Not all of them are feeling confident just yet. Whilst, as you know, the demand indicators nationally are really strong, there are areas and sub-markets which are not looking so great. Central London, particularly notable. Actually from a practical point of view, a product-led strategy really it's great because it adjusts really quickly and really effectively to an uncertain market. Whereas as you'll remember, a pricing strategy takes around four to six months to fully roll out. What would we do if the national housing market shut, as it did quite catastrophically in March last year? In the middle of that, what do you do? If a local area has its housing market shut, there are practical considerations for us. It's not to say we're not doing some price rise too. It's just less of the mix this year. I suspect that by the end of the year when we look back, we'll be close to the sort of 70/30 product price growth end of the spectrum rather than perhaps where we've been in previous years, which is 50/50. That was really the logic with going after that. The other thing that's worth noting when you look at ARPA in total is when we talk about ARPA in total, that is the blended ARPA between agency and new homes. I think what we'll see in 2021, as I noted in the presentation, new home developers are sold out pretty much, the large ones. We'll see a double impact. We'll see a reduction in volume of developments listed on-site because they're all sold. Also fairly rationally, and the new homes developers are terribly rational, you don't market so hard if you're forward sold and you've sold everything you've built. You guys will know from the notes that the big PLCs put out, a lot of them are forward sold until the middle of the year. Inevitably you don't market quite so hard. That also feeds into the blended ARPA. Secondly, you asked about Scout24. Yeah, I think it's a really interesting product. We talked to them. I like the idea. I think we have to remember the German market is different. P2P sales and the sort of mindset around transactions and I know it's rentals, but P2P rentals as well in Germany, much stronger market. I'd never say never. It's certainly not on our roadmap right now. It's one to keep a watch. I have a gut feel, and we haven't researched it. I have a gut feel that U.K. tenants would behave quite differently. We also, of course, have to be mindful that the legislation in the U.K. around upfront rental fees is different. That would add complexity if we chose to go into that market. What we've chosen to do, to sort of go after a similar theme is all around our digital tenant journey. By giving the passport upfront, which is free to tenant and agent and viewings manager, which I'm sure you've seen my slides so I can't talk about it too much, but viewings manager which really helps efficiency. We've had feedback from agents that it's reduced no-shows by 50%. Part of that is because the viewings manager reminds tenants to turn up. Part of it is actually feedback from tenants saying they much prefer it because if they found somewhere else they can cancel automatically without having to ring up. Obviously being British we don't like having difficult conversations so it's much easier to do that from a link. The monetization for that comes, and it sort of just playing to your last question, the monetization comes from both referencing. Referencing is a profitable business and obviously that all feeds through. Also what we call in tenant services. The idea when you move into a rental you really need to sort out insurance. Many tenants don't realize that they are responsible for insurance and they think it's covered by the landlord. That's an interesting conversation. We've helped 7,000 tenants with that. We are also now starting to talk to them about broadband. As an aside, one of the fascinating things we've learnt is that broadband is more important to tenants than water, which probably at the moment makes a load of sense, doesn't it? We're all connected to everything by broadband. They actually sort out broadband much earlier in the process. Again, we're exploring that. It's early days for us. It's really promising because if you offer a good product at the right moment in the conversation, and of course, with referencing, we know you're going to be moving in as a tenant because the reference has passed and we know the moving date. What we can now experiment with, and it's showing some really promising signs, is when do we start talking to you about broadband? That's how we know that you have to start talking about broadband before you start talking about insurance, because it's much more important and people want to sort it early. In terms of mortgages, we continue to work with Nationwide. We have learned so much in the last year. You'll remember I sort of described it as an experimental partnership. We've learned so much in the last 13, 14 months. Actually this year we're really planning to push on. The thing for me right now is I want to accelerate our learning. Not particularly focused on generating revenue from that. I don't want to just splatter the site with banner ads and things, which would be the way we could generate revenue or probably a pretty simple calculator or comparison tool. That doesn't feel like us. We want to really learn, and again, we're focused on making the journey more efficient, because I think that's how we'll maximize this revenue in the long- term. I'd hope that we see a little bit more revenue in 2022 from those activities, but probably it's 2023, 2024 before they really start to be noticeable in the P&L. Was that your three? Yeah. Thank you very much. You're welcome. Thank you for your question. We have another question from the line of Natasha Brilliant from Citi. Please go ahead. Morning, thank you for taking my questions. I just wanted to come back to ARPA and pricing. I know you said the majority will be product. Can you just confirm what the underlying price increase is for this year? Beyond this year, the sort of 70/30 split that you talked about, do you expect that to be the new norm? If so, will you need to put more investment into people, technology to constantly deliver these products if pricing power starts to fade? Second question is on the developers and the development numbers. I know previously when we've talked about the cyclicality of this business, there was a thought that maybe even in a more buoyant market, actually the developers would continue to advertise. Clearly, they're sort of out of stock at the moment. Is there a better way you could perhaps charge them to avoid these lumps and bumps rather than charging on a per development basis, some sort of retainer just to try and smooth that revenue stream? My final question is just on cash. You talked about maintaining a cash balance of about GBP 50 million. Why do you feel that that's necessary, and would you go below that for any reason temporarily? Thank you. You're welcome, Natasha. Your first question, pricing. What we're doing with our pricing is we're expanding our geographical and stock-based splits. You might remember, I think I talked about this last year. If you roll back a few years in Rightmove, we used to charge the same amount regardless of stock level and regardless of location, which wasn't the most efficient way of doing pricing. What we've been doing over the last few years is, I think last year it was sort of ±GBP 60, GBP 70, depending on the area in the country. We divided the country up into five zones. This year we're expanding that a little bit more, so more like ±GBP 100. And also we're just looking at those agents who've got higher stock. Can't give you sort of average increase because it doesn't really work like that. It's very different depending on the customer type and package. That's the sort of sense. If you are a customer in those groups, you're probably looking at 10%, something like that. In terms of 70/30, interestingly, I think our growth in 2015 was 70/30, and we then probably 2019, we would have been 50/50. It does move around. I wouldn't want you to think that 70/30 is now a new normal. We plan it and it changes depending on the market. Depending on the market structure, it could be anywhere between those two. They're probably the end stops of the range. This year it's probably more likely to be 70/30, but I wouldn't want you to think that it might not be 50/50 next year. It doesn't really indicate anything, because after all, for us, it all looks pretty similar when it hits the P&L. We don't mind. We think either model works, and what's more important is does it work for our customers. Certainly wouldn't want to suggest we've given up on 50/50. I'm sure you'll see it again. In terms of developers, yeah, it's an interesting question. We have looked at different models in the past. I actually think this model, the model we have is a pretty reasonable model for us and our customers. I suppose I can sort of whinge about things, and many people will tell you I'm good at whinging. Actually it is a hedge. It is a semi-hedge because the market's countercyclical. When agents are having a really good time because the market's great, we do well with agents, but new home developers are also doing well because they're selling lots, and vice versa. I'm probably not terribly minded to change the model because I think that natural hedge, whilst I have to accept that it has its down moments, it's also, if you look at numbers in, say 2019, it helped us. Actually, I think it's a reasonable balance. What the developers are doing is they're still listing all their stock with us that they have. They still spend on marketing. They just take away a little bit of the discretionary marketing at the top, which as I say, I think is entirely rational for them. Yeah, we continue to look at it. I don't think we'll change it. On your cash question, perhaps I'll pass to Alison to talk about GBP 50 million. Sure. Hi, Natasha. You should think of it really as a liquidity protection measure, and probably a bit of caution in calling an end to the volatility of the last year. Certainly, our underlying policy in terms of returning surplus cash to shareholders has not changed, and neither has our policy in terms of long-term holding of cash on the balance sheet. I think we are just being mindful of the way that the past year has played out, and particularly the third lockdown, where there were moments at which it seemed at least likely that the housing market would be closed again. It's really just a reflection of caution in calling an early end to volatility. We're making a start to returning to a more normal balance sheet with the dividend and the resumption of the share buyback. You shouldn't really read anything into the higher levels of cash other than a bit of caution in preserving some extra liquidity. Okay. That's really helpful. Thank you to you both. Thank you. Thank you for your question. We have the next question from the line of Robert Bagge from Berenberg. Please go ahead, sir. Your line is open. Hi. Yeah, thanks. Just one follow-up from me, actually. It's maybe a question for Alison. If I was to look at the top line growth 2021 versus 2019, the growth is coming at zero or next to zero profitability. Obviously, you've been through very strange times, so I'm asking a question on, is this kind of a trend where we should expect growth because, as you mentioned, it's coming more from product, more investment. Should we expect growth now to come at lower profitability levels? I think Alison alluded to a margin more towards the 70% level. Or is this kind of an abnormal trend, and we should expect margins to progress back up to the mid-70s% that we've seen in the past? Thanks. Thanks, Robert. I think, in terms of the drivers of growth, we are seeing growth in ARPA, particularly at the agency level of sort of 7%. We've talked this morning about a return to the sort of margins that you saw in 2019. There is definitely an element of cost catch-up this year. If you look at the profile of costs during 2020, growth savings of GBP 4.6 million will not repeat this year. The majority of them won't repeat this year. There is an element of catch-up, particularly with respect to recruitment, which will accelerate some of the costs into 2021. I wouldn't necessarily read that as a structural change in the margin of the business. If you think about the margin at the agency level, which is the primary driver of our margin, and how strong that is, it takes a large movement in margin elsewhere to really make a dent in that. What you're seeing in 2021 is an element of cost increases on 2019, which is a combination of lack of savings, the lack of the savings that we saw in 2020, the return of a more normal level of annual increases of sort of GBP 5 million-GBP 6 million, which is the levels that we've seen in the past, and then an element of catch-up. Don't forget that 2020 was the first year in which we saw a full year of Van Mildert costs, which will also be included going forward. Those are the underlying dynamics of the margin for 2021. All right, perfect. Thank you. Thank you for your question. We have the next question from the line of Cynthia Cuomo from Deutsche Bank. Please go ahead. Your line is open. Good morning. Thank you for taking my question. I have just one follow-up for Alison, actually, on the cash return policy. Considering where the cash balance ended in 2020 and considering what your previous policy was to return all excess cash to shareholders, should we think that if you want to get to around the GBP 50 million balance you mentioned, the buyback program in 2021 could be substantially higher than it used to be? Thank you. Sorry. She's making a funny face at me. Hi, good morning. Clearly, the in-year level of cash generation for 2021 will be similar to previous years, yes. We ended the year with just under GBP 97 million of cash on the balance sheet. If you take this final dividend, which is about GBP 40 million, plus the in-year cash generation, we will potentially need to accelerate some of the buyback levels that we've seen in the past in order to end the year with GBP 50 million, but that is what we will do. Does that answer the question? Yes. Thank you. Thanks, Alison. Thank you for your question. We have another question from the line of Lisa Yang from Goldman Sachs. Please go ahead. Good morning. I just want to follow up on the ARPA growth guidance. You said it would be mainly led by product this year. Could you maybe give us a bit more color in terms of the main contributors and your assumptions around the package upgrade beneath that? The second question is similarly on the ARPA. Would it be possible to get your thoughts around the evolution of ARPA for agents as opposed to new homes? I understand new homes might be under a bit more pressure. If you were to compare versus the 2019 level, would you say ARPA growth for agents would be a bit higher and new homes a bit below where it was in 2019? The third one would be on your comments around the revenue opportunity from referencing contract tenant services. Could you maybe talk about the sort of roadmap to just sort of tap into that revenue opportunity? How big could that be? Is that going to be a contributor for 2021, or should we think about maybe more the outer years? The very last one, if I can. Is it just possible to get your sense of how you think commission pools for agents have changed in 2020, just to get a bit of a sense of the underlying health of your customers and how you think that could go for 2021? Thank you. Thanks, Lisa. ARPA growth. What's going to drive ARPA growth in 2021, I think that was the first question. Mainly, as you can see, sort of continuing Optimiser upgrades. It's not the only thing. You might remember, you can either buy our products as an agent, you can either buy them in a package or you can actually buy them sort of à la carte. I think the main driver would be those Optimiser upgrades. People upgrading potentially from Optimiser 2015, which was the old package, up to our new super premium package, Opti 2020. You'll see, we're seeing upgrades at about the GBP 350, GBP 360 level. That makes quite a big difference to ARPA quite quickly if we continue on that path. That's the majority of the ARPA growth in agency. Yes, in terms of the growth in segmental ARPA, so new homes and agency. Yeah, I think your assumption is broadly correct, that we'll see compared to 2019 at a segmental level, we'll see more coming out of agency than we will out of new homes. Yes, is probably the shortest answer possible. Then sort of roadmap from here on that digital tenant journey and the journey to more revenue. Think the contribution in 2021 will be small, probably similarly, I wouldn't want you guys to be writing any big numbers into your notes for 2022, probably even 2023. I think it's a sort of three to five-year horizon that we're looking at in terms of that journey. Obviously, we're sort of laying down the structure of the journey. I don't think whilst tenants are moving towards it, and I'm absolutely delighted, actually, that we're seeing from an agent perspective, we're seeing up to 70% fewer viewings per let, which of course is efficient for agents. The other thing that's not often talked about, of course, it's much better for tenants because that means tenants aren't wasting a lot of time and potentially facing disappointment. I don't think you should expect a particularly notable revenue contribution through until probably three to five years from now. I think that was it. Does that answer your question, Lisa, or was there something else I've missed? Yeah, just wondering your thoughts around the evolution of agents' commission last year and into 2021? Yeah, good question. Sorry about that. Measuring commission is definitely more of an art than a science because unsurprisingly agents don't publish their commission rates because they're negotiating them. You have to rely on a few relatively small-scale surveys, and you have to be a bit careful because extrapolating too hard becomes a fool's errand. What I think we've seen is that commission has bumped up a little bit, maybe 5- 10 basis points. That sort of level, so I don't want you to get carried away. The other thing, of course, that's happened is that achieved price has gone up and we continue to see pretty good achieved price growth. All in all, I think the net agent commission pool has gone up at a unit basis. Then, of course, this year I would like to think we'll get back to a more normal transaction run rate. On a volume basis compared to last year, maybe they'll sit a bit more as well. I think agents are in an okay place, actually, when you take all of that together. I think it's interesting that we're seeing good agents, actually, some good agents are noticeably pushing their commission up a bit more than 5 basis points, but probably a reasonable average guess. Miles, anything to add on agent commission pool? There's obviously still a large positive of sold subject to contract pipelines. There's obviously the Stamp Duty that could affect some of that. Overall, agents are reporting to me that their cash flow is very positive. Thanks, Miles. Sorry, Lisa, have we covered that one off now? Is there anything else I missed? Yeah, no, that's perfect. Thank you very much. Thank you. Thank you for your question. We have another question from the line of Gareth Davies from Numis. Please go ahead. Your line is open. Yeah. Hi. Morning, guys. Just one left from me as well. In the context of the presentation you did earlier online, you mentioned a number of innovations looking forward. I think the one that stood out, was quite interesting, is the move into auctions. Certainly felt slightly left field to where we've seen you go in the past. I just wondered if you can expand on the scale of the opportunity, how your payment model would work in that environment, and what's particularly interesting about it. Okay. Let's start with what's interesting, and it may explain the rest of the point. What's interesting about auctions is, I think I sort of rambled on a bit in the presentation. I suppose the U.K. public probably has a vision of auctions as an auction room, and a person with a gavel standing in front. The problem for most home buyers is at the moment the gavel falls, you're committed. Which means if you need a mortgage, you probably don't get involved because the difficulty is you then have, I think it can be up to a 10% deposit. The auction fees are quite high, and of course, you can't apply for a mortgage on something that is in auction because you don't know if you're going to buy it. I think it puts people off. What we've seen emerge in the last probably five years is the online conditional auction. The features of an online conditional auction, there are a few different suppliers who offer it. There's typically more information up front, so as a buyer, you can be a bit more confident. There's, of course, the fact that these auctions typically take place over a number of days or a week, and you're not under the pressure of an auction room because it's all online, so you bid online. Means that you don't have that, or maybe it's just me that would be worried about a twitch, meaning you ended up with a two-bed terrace in Bolton. That gives consumers more confidence. Probably the big thing is it's conditional. Those are the benefits for the buyer. If you need a mortgage, you're more likely to be able to participate. As a seller, and actually for the agent, what typically happens, and certainly with our initial partner, what we're seeing out of their data is completion is a lot quicker because a lot of the legal work has been prepared upfront. As an auction property, you're a lot more confident that it's going to sell. We're seeing completion at about 56 days from an online conditional auction, which is about half the time of a normal sale. From a seller, it's really important. It's not going to work for everybody because you may well achieve a slightly lower price, of course. What you start to do is you start to get certainty of sale, which for a number of people, not just people in financial distress, is really important. That's sort of what we've seen happen. This is really, as I said, been emerging over the last five years. That's why it's interesting. It's not a big portion of the marketplace, maybe a couple of percent of transactions. What we've chosen to do, because it has advantages for buyers and sellers, because we believe that it's an area that requires clear explanation, as I say, it isn't for everybody. We decided to sort of offer this service to carefully vetted online auction providers. We're not running the auction. That's not our experience. We will also give a lot of consumer information on the page. Not only can they see how to bid, and they can see the current bid and the time left and that sort of information, there's actually a help panel, which means they can understand exactly what is an auction. In terms of opportunity, which I think was the last part of your question, difficult to see at the moment. The current structure is it's pretty much it's an advertising deal. I think it's difficult to say because we don't know whether our participation and sort of sharing information will change the percentage of the market. Again, I wouldn't want anyone to get sort of massively carried away that suddenly we're going to turn ourselves into an auction provider. I don't see it. I think it might be a portion of the market, and who knows, it could grow from a couple of percent a bit, and that would be good news for us. It's really about us trying to service this part of the market and actually utilize our trusted status because consumers trust us, and actually we therefore can supply that sort of impartial information. That was a very long answer. Does that answer your question? Yep. Very good. Thank you. Thank you for your question. We have another question from the line, Miriam Meza from Morgan Stanley. Please go ahead. Your line is open. Hi. Morning, everyone. Thanks for taking my questions. Two left for me. Just on Van Mildert, just wondering how should we think about the cost base for that developing over time, particularly as we move towards the next stage of development. Are there any particular sort of step changes or things that we should be aware of there, and how you're sort of thinking about the margin profile of that compared to the core business? Then just on the agents, on hybrid agents, just wondering what you've seen so far in the market and sort of what your expectations are for the new year. Thanks. Thanks, Miriam. In terms of Van Mildert cost, the total cost base is certainly immaterial in the context of our total cost base. It's about GBP 3 million of operating costs, and then we amortize about GBP 500,000. You shouldn't expect to see any increases in that really going forward. It may come down a little. The majority of it is headcount. They've added about 80 heads in total to the overall headcount base of the business. That may change at the margin, but it will not be anything significant. Yeah, just to add to that, Miriam. I think the journey we're on, I mean, we're on this digitizing journey in rentals. I think what that means for Van Mildert is over time. We're using our data to make their process more efficient and more digital so we can increase volumes without increasing headcount. Our aim would be that the margin profile will look incrementally better as we start to run those changes through. In terms of hybrid agents, I think what we see is, again, they are good businesses. They are very prone to new listing numbers, because often that's when most of them charge. That's when their income appears. It is directly linked to the number of new listings. What we see with those businesses is that they probably had not a bad second half because new listing numbers were going up. I would imagine that the first half of this year, they'll have to pay a little bit more attention because new listing numbers are going down. I think it's just a slightly different dynamic. I don't think we should get carried away that either it's about to be a total new dawn or the death knell. They just cost a little bit more than a traditional agent because of their charging model. Does that answer? Yes, that answers it. Thank you. Thanks, Miriam. Thanks, Miriam. Thank you for your question. We have another question from the line of Andrew Ross from Barclays. Please go ahead. Your line is open. Great. Thanks, and morning, all. Thanks for squeezing me in. I've got two. First, wanted to follow up on Natasha's question, where I think you said for those agents who are seeing a price increase in 2021, that increase is about 10%. Can you tell us what% of agents are not getting a price increase for this year? I suppose quite a bit of mix going on there. On top of that, what percent of agents did not get a price increase for 2020 because COVID happened at a time where you might have had that conversation? Are there a big chunk of agents who have now not seen an increase for two years? That's the first question. The second one is your visibility over that kind of up to 8% ARPA growth for this year. At this point, how many of your agents have you had the ARPA conversation with? I know it always used to be kind of at the start of the year, but I think it's a bit more spread out now. Should we assume that because most of the product growth is Optimiser 2020, for those agents who you've had the conversation with, it's pretty much locked in at this point and there's not really room to do better? Is it possible that there might be more upsell from those agents as you go through the year? Thanks. Right. I'll do the second one first. What we've seen, we've had about 20-odd% of the conversations now for the 2021 price increases. Saw some 20s in that, aren't there? Yes, 20% of the 2021 conversations. I think that was one of your questions. The question about if someone's had a price rise, are we sort of locked in on the ARPA growth? No, absolutely not. We continue to see upgrades sort of pre and post price rise conversations. It doesn't necessarily lock us into that. Obviously, it sort of guarantees the floor, I suppose, but it doesn't lock us in. That was that one. In terms of 2021 price rise, I can't remember the exact number, but it's the majority won't be seeing a price rise. That's one of the reasons it'll be product led. In 2020, I don't have the number in front of me, Andrew. To get to your question, I think your sort of end point was, does that mean there's loads of customers whose prices won't have gone up in two subsequent years? Yeah. There won't be many in that category, I think is the answer. I don't have the 2021 number in front of me, I'm afraid. Is your plan that when you get to, I don't know, August this year, and you start to think about the price increase for 2022, that we're now going to go back to an across the board price increase for everybody? Maybe it's just too early to know. I think it's a good question. It's a little early. I think, as Alison noted a bit earlier on, there's still a reasonable amount of uncertainty floating around in our world for all of us, isn't there? I think, taking updates, as I have to repeat often to myself. I think we'll wait and see. I don't see a reason that we wouldn't return to a more usual pattern, but I think we have to wait and see what the environment looks like later in this year. What are you looking for there? Is it the health of agents or is it kind of competitive dynamics? Because I would have thought that given the state of the end market, which looks pretty solid, and given what we're hearing about kind of commission rates and the health of agents' P&L, I don't see at this point why there would be much of an uncertainty about your ability to do price for 2022. Yeah, are you just being cautious or is there something specific you're looking at there? Yeah, health agent. Yeah, you know me, I'm always a bit cautious. I would agree with everything you said in terms of what I would guess right now, but I think we don't need to make a decision now, so we'll wait and see a little bit. We've obviously got to work out what's going to happen with Stamp Duty, or Rishi's got to work it out, not me. There are the sort of general macro worries, so let's see how that pans out. Absolutely agree with everything you said. I don't see a reason today that we wouldn't be doing it. Very helpful. Thank you. You're welcome. Thank you for your question. There are no further question at the moment. Lovely. Well, should we call that a day then, everybody? There are no more questions? No, sir. There are no more question. Thank you, Roberta. Right. Well, thank you, everybody. Thanks for coming along and spending 50 minutes with us. As ever, if you've got any more questions, then get in touch with either Alison or I directly. Other than that, I can only wish you a lovely sunny Friday and a lovely weekend. Goodbye. That's come through the conference for today. Thank you for participating. You may now disconnect.