Rightmove has shared a promising update, indicating a robust start to the year 2024, with consistent revenue and margin projections for the entire year.
As the company prepares for its Annual General Meeting, it’s been reported that from the beginning of January to the end of April 2024, Rightmove has maintained its goals for both revenue and profit for the end of the year.
Rightmove continues to attract the majority of consumer attention when it comes to UK property portals, with a noteworthy 80% share of the total time consumers spend on such sites. Engagement on the portal is also high, demonstrated by 8 million users signed up for marketing, the delivery of over 19 million leads to estate agents, and the fact that over 40% of email leads were routed through Rightmove’s app during the four-month period.
Estate agency membership on Rightmove has seen a net increase of roughly 250 members from the end of 2023, thanks to strong retention rates and a buzzing lettings market, which alone accounted for a net growth of approximately 170 in lettings-only branches and rental operators.
The digital platform Lead to Keys has experienced significant growth with over 70 new partners joining Rightmove, and more than 170 current partners adopting the product. Optimiser Edge subscriptions have surpassed 700 for independent agents, which surpasses initial expectations for 2024. Rightmove currently anticipates that the number of agent branches will increase by up to 2% in 2024 compared to 2023, which is more than initially expected.
This rise in membership numbers is good news for the company’s revenue and profit, offering consumers more options on the Rightmove site. It’s noted, however, that lettings-only agents often contribute a lower Average Revenue Per Agent (ARPA), especially when they have a small property inventory.
In the new homes sector, Rightmove has added over 90 new developments to our entry-level Access package, which is specifically designed for housing associations. Similar to the lettings-only branches, these new developments contribute positively to revenue, profit, and consumer choice, although the ARPA from housing associations is typically lower than that from mainstream new home developments. Based on the broader market situation facing developers, Rightmove expects the total number of developments in 2024 to be roughly the same as in 2023.
Excluding recent changes in customer demographic, ARPA growth is expected to follow previous guidance, increasing by £100-110. Rightmove maintains its long-standing renewal and pricing strategies, with contract discussions progressing as usual.
However, due to the mix of strong ARPA and new customer acquisitions, Rightmove has modified its 2024 guidance as follows:
- Full-year revenue guidance remains unchanged at a 7-9% increase over 2023.
- Full-year underlying operating margin guidance also remains unchanged at 70%.
- Customer numbers are expected to grow by up to 2% over the previous year, instead of the slight decrease previously anticipated.
- Projected ARPA growth has been adjusted to an increase of £75-£85 from the 2023 ARPA of £1,431, considering the aforementioned shift in customer type.
Alongside notable financial institutions such as Lloyds Banking Group, Nationwide, and NatWest, Rightmove has invested in Coadjute, an initiative aimed at digitalizing and streamlining the property transaction process for consumers, agents, and the industry. Rightmove has also acquired HomeViews, a platform featuring a vast array of verified resident property development reviews, furthering strategic opportunities in the Rental Operator industry.
Rightmove’s strategic growth areas
Mortgages, Commercial, and Rental Services – are reportedly performing as anticipated. In mortgages, there has been a surge in consumer interest and enhanced mortgage journeys due to machine learning improvements. These optimizations have benefited both consumers and Rightmove’s partners. Meanwhile, the re-platforming of their Commercial division is progressing swiftly, with a new landing page expected later in the year. The Rental Services sector is witnessing strong engagement from lettings agents, which is also expected to positively impact future Rental Services prospects.
Rightmove’s goal remains to assist its network of agents and developers by offering real-time, data-driven digital solutions that help scale their businesses. Additionally, Rightmove is dedicated to providing free resources, training, and CELA qualification prep to all members and continues to lead its competition in generating high-quality leads.
The most recent monthly House Price Index from Rightmove shows a 1.1% monthly increase in asking prices, with a 1.7% rise in annual house price growth – the highest it has been in 12 months. Sale agreements from January to April in 2024 have seen a 17% increase compared to the same period in the previous year. Market activity is intensifying among sellers and buyers, with predicted sales transactions reaching 1.1 million for the year. However, the report notes that higher mortgage rates may pose affordability challenges for average buyers and the market’s pace can vary considerably by region and segment. The time to complete housing transactions is still long, averaging five months from offer acceptance to completion.
In the rental market, activity remains high. The Rental Tracker indicates that there are approximately 50,000 properties required to return the rental supply to pre-pandemic levels. The start of 2024 has seen an 18% lift in rental listings compared to last year, with rental agents receiving an average of 14 leads for each available property, and rents rising by 7.6% compared to the same period in 2023.
Johan Svanstrom, CEO of Rightmove, expresses confidence in a better year for the UK property market in 2024 compared to the previous year. Despite varying dynamics in different market segments, Svanstrom highlights the strength in resales. He expresses satisfaction in the recognition of the value Rightmove offers to both new and existing partners. With a growing collection of innovative digital services and a surge in both lettings branches and budget-friendly new home developments, the company remains optimistic about financial and strategic development for the year and is committed to driving further growth on the platform.
