Rightmove shrugs off housing market blues to report robust annual result

Rightmove shrugs off housing market blues with dividend hike as profits near £200m despite slowdown

  • Britain’s largest property website said its profits increased by 6.9% to £195.7m
  • Visitor minutes on its platform were still a third higher on pre-pandemic levels
  • Rightmove said it was ‘not materially impacted by the property market cycle’

Rightmove has hiked its final dividend payment after another strong annual performance, despite a slowing UK housing market.

Britain’s largest property website revealed turnover expanded by 9 per cent to £337.6million last year, while profits rose by 6.9 per cent to £195.7million.

Following the results, it has recommended a 5.2p per share final dividend, an 8 per cent boost on the prior year, taking its total dividend for 2022 to 8.5p per share.   

Recovery: Britain’s largest property website revealed that its turnover expanded by 9 per cent to £337.6million in 2022, while profits rose by 6.9 per cent to £195.7million

Trading was robust during the first few months of the year when home transactions were bolstered by a Covid-induced remote working boom, cheap loans and the desire to live in more spacious dwellings.

Conditions began to normalise afterwards as the Bank of England’s consecutive base rate increases and inflationary pressures caused by skyrocketing energy prices began to bite.

The British housing sector received a further blow after former Prime Minister Liz Truss’s controversial ‘mini-Budget’ sent mortgage rates soaring, severely impacting consumer confidence.

Rightmove said the number of minutes spent by visitors browsing its platform plummeted by about 2 billion to 16.3 billion last year, as the volume of real estate deals softened amid ‘a significantly less frenetic’ property market.

Yet this was still more than a third up on pre-pandemic levels, while the amount of advertisers on its platform ticked above 19,000, with a drop in estate and letting agents being offset by a rise in homebuilders.

Average monthly revenue per advertiser grew by 11 per cent to £1,314, the second-fastest year of absolute growth, thanks to high demand for the firm’s digital products and membership price increases.

‘The strength of our results is a reminder of how effective and integral our new and existing products and services are in helping our customers in both faster and slower markets,’ said outgoing chief executive Peter Brooks-Johnson.

On Monday, figures published by the Nationwide Building Society showed that UK house prices fell by 1.1 per cent in the 12 months ending February, the largest annual decline in 11 years. 

Two days later, the Bank of England revealed that the number of mortgage approvals in January decreased for the fifth consecutive month to its lowest level since the 2008/09 global financial crisis.

But even against this more challenging backdrop, Rightmove insisted that it was ‘not materially impacted by the property market cycle, other than in the most extreme circumstances’.

It forecasts average revenues from each advertiser to grow again in 2023 and total customer volumes to resemble what they were in the latter half of last year.

Sophie Lund-Yates, the lead equity analyst at Hargreaves Lansdown, said: ‘While a cooling market doesn’t affect Rightmove directly, it does impact the estate agents it relies on for fees.

‘At the moment, things continue to look healthy in that regard, with price increases something of a guarantee.

‘As the market changes and estate agent numbers continue to decline, Rightmove could find itself needing to generate income in more creative ways in the future.’

Rightmove shares had fallen by 2.5 per cent to 549.6p in early trading on Friday and have declined by about 18 per cent during the past 12 months. 

Read more at DailyMail.co.uk