Could Rightmove really increase charges to agents again?

A City analyst has fuelled speculation that Rightmove has a goal to increase its monthly average revenue from each agency from the current £856 to no less than £2,500. 

Anthony Codling of Jefferies - a City consultancy in the past linked with ZPG - says in a note to investors that Rightmove has “a Holy Grail annual revenue per advertiser figure of £2,500 per month”.

This comment follows Rightmove’s half year trading statement on Friday which showed that in the first six months of 2017 agency ARPA had risen 10 per cent to £856 per month and new homes ARPA had risen eight per cent to £1,210.

A spokeswoman for Rightmove told Estate Agent Today over the weekend that: “The £2,500 figure will have come from a comparison that we have often used at full year and half year results, when looking at Rightmove ARPA compared to newspaper advertising. Back in 2007 newspaper ARPA for agents was £2,500 per month.”

Codling’s note continues: “Agents might complain and new home developers might moan about the fees they pay to Rightmove, but both are spending more and more. At the half year Rightmove’s revenues and underlying operating profits were up 11 per cent each and the operating profit margin was steady at just over 76 per cent, a level which must be hard to swallow for the estate agents battling a tough secondhand housing market and a multiple of the profit margins of the Help to Buy assisted housebuilders.”

Perhaps reflecting that Rightmove’s increase in profits, revenue, traffic and ARPA came only 24 hours after dismal half year figures from both Countrywide and Foxtons, Codling adds: “Come rain or shine it appears Rightmove is able to make super normal profits.”