Rightmove injected a bit of good cheer into the markets today with an upbeat results statement: after a rotten 2008, it reckons that the property market is starting to revive, with web traffic and advertising numbers both up in the first half of this year. In fact it’s feeling so cheerful that it’s actually upgraded its profit forecasts for the year. But although its results will presumably prompt talk of a housing market recovery, we probably shouldn’t break out the champers just yet; we’ve still got a long way to go, and Rightmove is much better placed than most to weather the storm…
Rightmove’s first half results were a bit of a mixed bag – profits actually fell 8% to £18.2m, but membership numbers recovered a bit after a dismal second half of 2008, rising 1% between January and June (although they’re still down on this time last year). So agents are starting to return to the market, and judging by Rightmove’s increased web traffic (up 3% on last year, including a single-day record of 22.6m hits on August 10) buyers are starting to show interest too. Lettings was apparently the most popular part of the site, as homeowners worried about falling property prices opted to let their premises, and first-time buyers struggling to secure mortgages decided to rent instead.
The property portal is now hoping to beat market forecasts for its full-year profits, although it admitted that figures may ‘not quite’ match last year’s earnings of £41m. This has been helped by a successful round of cost-cutting – the company has slashed its workforce by a fifth to try and improve efficiency, which is perhaps not surprising given that it reckons a fifth of estate agents (its major customers) have gone out of business too. Rightmove of course has the advantage of being an online business with fewer overheads – unlike its estate agent clients, it has no shop fronts to pay for.
So it’s all fairly positive stuff. But without wishing to rain on Rightmove’s parade, heralding this as the end of the housing slump may be a little premature. Sure, the market may have picked up a bit. But levels of activity remain very low by normal standards – and it’s not impossible that rising unemployment and higher taxes could lead to another dip further down the line. The signs are that Rightmove is going to survive more-or-less intact – as the rise in its share price today suggests – but estate agents shouldn’t be breathing sighs of relief just yet.
In today's bulletin:
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Rightmove sees green shoots in housing market
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