Rightmove reports surge in buyer interest

By This Is Money
Updated: 05:45 EDT, 21 August 2009

The UK's leading property website Rightmove believes the housing market's long-awaited recovery has begun, after it registered the most single-day visitors in the site's nine-year history this month.

Making a move: The property website says the worst of its woes are over

Rightmove believes that the 'toughest conditions in a generation' are now a thing of the past as buyers and sellers take the first, cautious steps back into the market.

And investors on the stock market agreed, sending Rightmove shares up 12% to 51.6p today on the back of the optimistic announcements.

However, the online property listings company, which aims to deliver 'convenient and effective' house-hunting tools, also revealed the impact of the slump in its figures, with pre-tax profits for the first half of 2009 down 8% to £18.2m on last year.

But the firm said steadily improving conditions over the summer months have driven higher membership numbers, with July seeing the best monthly revenue growth for the year to date and the second highest ever monthly operating profit.

Rightmove reported that membership numbers since the start of the year are up 1%, with the decline in number of estate agents in the market slowing.

It had seen up to 300 estate agents quit the service each month at one stage as many struggled to survive, estimating that around a fifth of the market has been forced out of business.

It now expects to beat market forecasts for full-year results, although it said figures probably will 'not quite' match last year's £41m in earnings.

Rightmove's positive stance did not extend across the entirety of the property industry, though. It showed that the new home development market is still depressed, with membership numbers unchanged and new developments advertised down 14%.

Furthermore, overseas homes advertisers fell by 11% over the six months.

However, improving interest from home buyers saw website traffic rise 3% year-on-year as activity defied the usual summer lull.

Miles Shipside, commercial director of Rightmove, said: 'We do believe we're past the low point, which appears to have been last winter.'

'But there's still limited mortgage finance out there, so a return to traditional sale volumes does require greater mortgage lending.'

'Overall the outlook is stable, although the market will possibly bump along the bottom rather than see an immediate full recovery,' he added.

July's Halifax property price figures showed values rose by 1.1% - the second gain in the past three months, meaning that house prices had fallen by less than 1% so far this year in a marked improvement on last year's double-digit falls.

The value of the average UK property had plunged by 16.2% across 2008, according to Halifax, as the recession and financial crisis stopped the market in its tracks.

Rightmove took action to offset the slump by slashing costs and cutting its workforce by 20%. It said today operating costs had reduced by 19% to £13.7m, which helped limit the impact on profits.