UK property portal Rightmove flags pressure from fall in new homes

Rightmove, Britain's largest property portal, reported a 1 per cent  rise in half-year profit on Friday and said revenue from new homes will be pressured by falling development numbers, with no recovery expected in the second half of the year.

The British housing market has been betting on a near-term recovery on easing mortgage rates amid cut-throat competition among lenders and potential Bank of England interest rate cuts in a sector where demand levels have remained subdued for most of 2024.

"It will take one or two rate cuts before people really start to feel that we're truly out of the woods in terms of any further rate pressure," Rightmove Chief Financial Officer Alison Dolan told Reuters.

"That sense of stability still needs a bit more time to really be felt on the part of consumers," she added, saying affordability remains a headwind.

The company, which charges estate agents and homebuilders a fee to list their properties on its website, has benefited from the strength in the lettings market, but that business has typically lower average revenue per advertiser (ARPA) than the home sales segment.

Listings of new homes developments for the six-month period ended June fell about 3 per cent  to 2,868 from 2,946 at the end of 2023.

"Development numbers continue to fall and so we lose a bit of new homes revenue which is obviously disappointing, but the bigger theme is just how difficult the market has been for the developers," said Dolan.

The company, however, reiterated its full year 2024 guidance for overall revenue growth of 7 per cent -9 per cent .

Rightmove posted a 1 per cent  rise in half-year underlying operating profit at 135.1 million pounds ($173.8 million), while ARPA grew 6 per cent  to 1,497 pounds per month.