Big Rightmove losses predicted, but it's recovering fast - bank

The investment bank UBS says it’s forecasting that Rightmove revenues will be down £53m in the first half of this year.

“The £53m represents the impact of three months Rightmove’s 75 per cent discount period” says a note from the bank to its investor clients. 

The bank reports a four per cent drop in agency numbers for Rightmove during the first half of the year - roughly the same proportional drop it reports for Zoopla.

However, the bank also says that as soon as the housing market reopened after lockdown, so the number one portal was recovering rapidly.

“Listings and the share of premium of listings on Rightmove both began to recover during June 2020. Premium listing are now 33 per cent of all listings, the highest since we began tracking this data in 2015” the note says.

And it continues: “We expect Rightmove costs in H1 2020 to be down £4m year on year, representing a £2m benefit from furlough and other cost savings, and a £2m impact from shifting marketing spend into H2 2020. We therefore forecast EBIT to decline from £108m to £59m.”

The same report by the bank looks also at Purplebricks and suggests that its market share is beginning to stabilise after two years trending downwards.

UBS figures show that in its early days in the first half of 2015 Purplebricks had under 0.5 per cent market share, but this rose to a high of 4.5 per cent around late 2018 and early 2019.

However, since that time it has had a consistent downward trend, hitting around 3.8 per cent in the early spring before - for the first time in almost two years - rising slightly to around 3.9 per cent, where it has stayed during recent months.

UBS says that for 2020 it expects a total of 1.0m transactions, rising to 1.1m in 2021.