- Britain’s largest property portal forecasts revenue increasing by 8-10% this year
- The FTSE 100 company recently fended off a takeover approach by REA Group
Rightmove expects higher revenue growth in 2025 as lower interest rates spur a recovery in the UK housing market.
Britain’s largest property portal forecasts turnover increasing by 8 to 10 per cent this year after growing by 7 per cent to £389.9million last year.
It said that ‘supportive’ property market trends, like the Bank of England’s recent base rate cut to 4.5 per cent, were ‘beginning to feed through to lower lending rates for home movers and industry participants’.
While expectations for the scale and pace of further rate reductions have moderated amid signs of higher inflation, markets still expect another 50 basis points worth of cuts in 2025.
This would take the base rate to 3.5 per cent.
FTSE 100-listed Rightmove, which recently fended off a takeover approach by REA Group, also noted that agreed resale market deals had exceeded pre-pandemic levels since August, while completions were closing in on 2019 volumes.
Rightmove anticipates sales will be supported by membership numbers rising by 1 per cent and average revenue per advertiser (ARPA) expanding by £95 to £105.
Its membership levels went up by the same percentage to 19,047 last year, partly due to a 17 per cent uplift in its commercial division.
Year ahead: Rightmove expects higher revenue growth in 2025 as lower mortgage rates spur a recovery in the UK housing market
Retention rates among existing estate agency partners also totalled 90 per cent – the second-highest figure for a decade.
Rightmove said clients adopted its Optimiser Edge package at the quickest speed ever, with more than 1,600 partners upgrading during the year.
Nearly a third of estate agents subscribed to Optimiser Edge by the end of December, compared to 8 per cent 12 months earlier.
Over the same period, the share of developers with Rightmove’s ‘Advanced’ new homes package jumped by seven percentage points to 60 per cent.
This bolstered the FTSE 100 company’s ARPA by £93 to £1,524 per month last year and its underlying operating profit by 4 per cent to £273.9million.
Following the result, Rightmove hiked its final dividend by 7 per cent to 6.1 pence per share, taking its total full-year dividend to 9.8p per share.
‘Being the market leader creates a virtuous circle for Rightmove,’ remarked Russ Mould, investment director at AJ Bell.
‘Its site has the most listings and is, therefore, the one which prospective property buyers will go to when looking for their next home.
‘This reinforces its position as a must-have product for estate agencies and provides it with significant pricing power when it comes to securing subscriptions from agencies.’
Rightmove shares were 3.3 per cent up at 664.2p on late Friday morning, making them one of the FTSE 100’s top five risers and taking their gains to around 16 per cent over the past year.
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