London is not in a property bubble, says Zoopla boss

Mr Chesterman said that outside London house prices were only just getting
back to their level in 2007, while transaction volumes remain substantially
down on a decade ago.

“We’re not in a world today where there are irresponsible lending practices
driving prices,” he said. “In the broader market, we’re not seeing house
prices or price earnings ratios at record highs.” Zoopla, which owns
websites including PrimeLocation, SmartNewHomes and HomesOverseas, was
valued at £919m when it floated on the London Stock Exchange last week.

Mr Chesterman, who retains a 4pc stake worth £36m at the flotation price, said
he did not consider pulling or delaying the float due to the jittery state
of the initial public offerings market.

The entrepreneur who founded Screenselect, the precursor to DVD rental website
group Lovefilm, in 2003, set up Zoopla in 2008 with a belief that the
property market was inefficient and required consumers to do too much

Zoopla holds 20m historic transaction prices dating back to 1995 and provides
valuation estimates for every property in the UK. The group advertises more
than 1m properties for sale and rent from 90pc of Britain’s estate agents
and developers, receiving about 45m visits a month to its websites in the
first six months of 2014 – 37pc up on the same period of last year.

Zoopla and rival Rightmove face potential competition from the Agents’ Mutual,
a rival online offering being set up by property agents.

Analysts estimate that almost £30m could be stripped off Zoopla’s revenues if
the Agents’ Mutual signs up 5,000 branches, should those branches then
choose not to list on Zoopla’s portal.

However Mr Chesterman said Zoopla’s services are complex, with particular
barriers to entry in the databank operations.

“No one has chosen to replicate it,” he said of the company’s property values
database. “We spend a lot of time constantly evolving it, building very
complicated proprietary algorithms to do this.

“Also, over the last six years we have collected over 120m unique data points
about properties in the UK from our users on about 10m homes. It’s hard for
someone else to play catch-up to that.”

London is not in a property bubble, says Zoopla boss
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