Rightmove, the UK’s biggest property portal, pointed to signs of life in the housing market today, with sales rising and conditions in the rental sector staying “very busy”.
Its website is often the first place many buyers enter the housing market. It said today that sales agreed between January and April were up 17%. That came “with both sellers and buyers now increasingly looking to transact”, it added.
But the FTSE 100 constituent also warned that “higher mortgage rates continue to stretch affordability for the average buyer, and the market is operating at different speeds across its many segments and areas”.
Those lingering concerns added to a feeling in the City that an interest rate cut from the Bank of England should come sooner rather than later, with some experts hoping for action as soon as next month. But consensus forecasts continue to see September as the month most likely for the first rate cut of the post-pandemic era. The BOE left rates on hold at a 15-year high of 5.25% for the sixth consecutive meeting this week.
Rightmove’s stocks stayed under pressure. It was down 30p to 543p, a drop of 5% and the biggest of the day on the top tier stock index. The company continues to expect “total sales transactions of 1.1 million in 2024”.
City experts pointed to concern about revenue generation at Rightmove before a full rebound in the house market. Russ Mould, investment director at AJ Bell said there were “signs Rightmove is struggling to generate as much money from each of its individual customers”.
He added: “ A shift in the mix of Rightmove’s business, with strong growth in the number of lettings agents subscribing to the platform, is affecting the key average revenue per advertiser metric ... Tellingly, the customer growth seen at the start of the year is not translating into upgrades to the full-year revenue and profit outlook.”
There was also insight into how the rental market remains under-supplied. Rightmove’s latest “Rental Tracker” showed “an estimated 50,000 properties [are] needed “to return the supply of rental properties to pre-pandemic levels.”
Rental listings in the first four months of the year were also up by about a fifth, at 18%.
Nonetheless, rental agents “ received an average of 14 leads per available property, and average rents were 7.6% higher” year-on-year.
CEO Johan Svanstrom, said: “We continue to expect a better year for the UK property market in 2024 than in 2023. Within that, we see different dynamics across the many segments that we serve, with particular strength in resales”.
The £4.3 billion company said its latest index of the asking prices of houses rose at an annual rate of 1.7%, its highest in year.
