Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Rightmove boosted revenues and profit last year as estate agents spent more with the UK’s largest property platform to try to shift homes amid a sharp downturn in the housing market.
The company reported an 8 per cent rise in annual profit before tax to £260mn, on rising advertising revenue as agents paid more for marketing. Rightmove also forecast revenue growth of between 7 and 9 per cent this year.
But it said online traffic to its site had fallen last year and warned that customer numbers would likely drop in 2024 due to continued uncertainty in the market, sending shares down 4 per cent in early trading on Friday.
“When the market is a little bit weaker, there is arguably a greater need to use the Rightmove platform to reach buyers and sellers,” said chief executive Johan Svanstrom. “Both estate agents and new homes developers needed to work harder to close sales.”
A sharp rise in borrowing costs last year and fears over sinking house prices triggered a slowdown in the market, with about 1mn homes sold nationwide according to Land Registry data, the lowest in a decade.
Rightmove said the number of days it took to find a buyer rose from 37 in 2022 to 59, and agents and developers spent more on marketing and other services.
Despite the slow 2023, Rightmove’s annual revenue rose 10 per cent to £364mn on the back of a 6 per cent increase in spending by estate agency clients, and a 26 per cent rise in revenue from new home developers trying to shift houses.
The company’s profit margin stood at 71 per cent, down from 73 per cent the previous year.
Svanstrom said that during the property market boom that followed the Covid-19 pandemic, many new home developments were pre-sold. “Now, their developments take a little bit longer to sell so they stay on our platform,” he said.
The website remained popular with consumers, attracting 2.2bn visits in 2023. People spent more than 15.4bn minutes in total browsing on Rightmove, the company said, down 6 per cent on 2022, but well above pre-pandemic levels.
Svanstrom said there were “very strong indications” of an improving market so far this year, with both listings and sales figures rising. The company expects 1.1mn UK home sales in 2024.
The company’s results came alongside data from mortgage provider Nationwide on Friday, showing UK house prices rose 1.2 per cent year on year in February, a bigger than expected jump and the first annual increase in more than a year.
But Rightmove warned that customer numbers were “likely to drop slightly” this year, “given the ongoing uncertainty in the macro environment”. The number of agency customers edged down 1 per cent in 2023, and developer client numbers declined 4 per cent.
Svanstrom said Rightmove was continuing to diversify its business into new areas including rental and mortgage services, and commercial real estate.
The company also faces a threat from the roughly £100mn acquisition of smaller rival property search platform OnTheMarket by the well-funded US property data group CoStar.
News of the deal last autumn sent Rightmove’s shares spiralling down 12 per cent, but they have since recovered most of the loss.
Adrian Lunn, director at Eddisons, said that with “a volatile housing market and growing competition, it looks like investors don’t see the upside in Rightmove’s future at the moment”.
