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Housing website Rightmove today signalled the housing market is on the mend as it bounced back from “the toughest property market conditions in a generation”.
The firm, which carries adverts for some 90% of homes for sale in the UK on its website, said it now has 16,874 members, such as estate agents — up 1% from the start of the year.
The number of estate agents advertising on the site was up 2% between New Year and the end of June, while lettings agents were up 15%.
Letting grew in popularity as cash-strapped homeowners searched for tenants during the recession, and potential buyers struggling to get a mortgage chose instead to rent.
However, membership numbers were down 13% from 19,301 a year ago, after a dismal final six months of 2008 when hundreds of estate agents went bust.
The collapse of Wall Street bank Lehman Brothers in September last year plunged the property market deeper into the abyss, as banks and building societies stopped lending and house prices crashed.
“The figures are down on a year ago as a result of the tough trading conditions in the second half,” said Rightmove managing director
Ed Williams. However, he said the website had the most visitors in its nine-year history on 10 August as the housing market recovery picked up pace over the summer. July was its busiest ever month. Miles Shipside, commercial director of Rightmove, said: “It is most unusual to have your record traffic day in August when people are meant to be on holiday.
“There has been a change in sentiment in the housing market with people thinking prices have bottomed and bargains are there to be had. People are search long and hard for good deals.”
The change in sentiment was reflected in figures. Rightmove reported an 8% fall in profits for the first six months of the year to £18.2 million. Revenues were down 11% to £33.6 million.
But the firm, which has saved money by axing jobs, now expects to beat market forecasts for full-year results, although it said figures may “not quite” match last year's £41 million in earnings.
Analysts at Numis Securities said the Rightmove results were “excellent”.
They upgraded profits forecasts for this year by 19% to £38 million and for next year by 33% to £45 million. Shares jumped nearly 6% or 25.1p to 452p.
Williams said: “Rightmove has proven its worth in tough times. Customer loyalty, coupled with cost management, mean we have been able to weather these housing market conditions with minimal impact on profitability.
“Our business is already growing again on all major measures whether that is in terms of usage of our website by home hunters, in terms of number of advertisers or in terms of their individual spend with us.” Shipside 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 lending. Overall the outlook is stable, although the market will possibly bump along the bottom rather than see an immediate full recovery.”
Figures yesterday showed mortgage lending jumped 26% last month to £16 billion. However, it was still down 36% on a year ago.
Reader views (9)
House prices on the up? Triple AAA tosh. And, NEVER trust an Estate Agent.
- Ted, London
It's a mistake to look only average earnings as a guide to affordability. Look instead at average household income and you'll begin to understand why house prices are more affordable than you might think and therefore continue to confound those determined to believe house prices will still crash. They may well drift and even decline modestly over the short term but the real direction is heading one way only.
- Amos, Oxted, Surrey
This doesn't prove there is a recovery it just proves how bad supply is that people news to use all means of searching for a good deal. The best indicator of the housing market in my view is mortgage approvals this shows the willingness to lend and how many people are actually managing to secure a purchase. Wait till rates go up or more vendors hit the Market then we will see the real effect the 125% mortgages to unemployed people had had on the Market
- Romael, London
Trust me - I'm an estate agent!
- Never Eat Tuna Again, London
What recovery, where's the jobs, where's the incomes? You have to be able to make or do something, to get money, not sit on facebook or twitter all day, get real you people, the party's over.
- Baz, London UK
WARNING.
Interest rates will begin to rise next year and the many millions who borrowed stupidly during the Brown /Clown false boom will have to face the true cost of their folly.
Expect any recovery to be weak and bumpy.
- Andrew Nicholls, Ely ,England
I assume you are being sarcastic, Keith!
Property prices are still too high relative to average earnings. Expect further falls.
Chris, London
- Chris Kumar, London
It's beginning to grate, Keith.
- Ted, London
Well done Gordon Brown for rescuing the country from the worldwide economic recession, which has hit many other countries far harder than it has us here in the UK
- Keith Price, Luton England
