Share Prices & Company Research


26 February 2021

Rightmove Taking a Wrong Turn?

Online real estate agent, Rightmove, today announced an uncharacteristically poor set of results, highlighting the complexities and problems that UK businesses have faced due to the COVID-19 pandemic. Both top and bottom-line growth suffered significant falls as the company scrambled to retain real estate agencies as many looked to cut costs during the height of the pandemic. Full year 2020 results saw revenue decline 29% and operating profit fall 37% as Rightmove slashed its agent fees by 75% between April and July and slightly less until September. These figures mark the steep declines in property transactions and prices during the height of the pandemic that has started to get back on track since thanks to governmental schemes and an abundance of disposable income for those that have been working from home and saving money.

The stamp duty holiday, introduced by the Government to help prop up the ailing housing market, is due to end in March but according to reports, could well be extended to June, likely pushing property transactions higher and the cost of homes higher with it. In part due to the stamp duty holiday, Rightmove saw a near one third increase in site traffic numbers and, despite a fall in agent memberships of 3%, the number of properties listed on the website increased.

If the stamp duty holiday were to be extended to June, we would expect a significant tailwind for Rightmove. We would, however, be wary of the demand drop off after the end of the holiday, whether in March or in June, as buyers and sellers rush to market to take advantage of the tax benefits. While demand for property will undoubtedly never fall to zero, the pandemic’s effect on consumer bank accounts, as well as the increase in unemployment, particularly after the furlough scheme ends, may provide further barriers to entry to buyers in the market, with property prices at all-time highs.

Please note that investments and income arising from them can fall as well as rise in value. This communication is for information only and does not constitute a recommendation to buy or sell the shares of the investments mentioned.

Rightmove Taking a Wrong Turn?

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