August 25, 2009
Rightmove - Things Are On The Up!
LONDON — U.K. property Web site company Rightmove PLC Friday said the U.K. housing market looks to be in the early stages of a recovery, although house prices in the hardest-hit parts of the country are likely to continue falling.
"The low point appears to have been winter of last year but the housing market reaches the bottom at different points, depending on what indicators you use, and I think more big pricing falls will come," Managing Director Ed Williams told journalists on a conference call Friday.
He warned of a "split market," with some parts of the U.K. prospering while other areas continue to languish in the grip of the U.K.'s recession.
"There's some unemployment black spots where you have a lack of demand and oversupply, but in more profitable areas prices have risen," he said. He believes U.K. house prices have risen between 5% to 10% since the start of the year.
The Council of Mortgage Lenders Thursday said gross mortgage lending rose 26% on the month in July to around 16 billion pounds. However, the CML believes the positive signs could form just a temporary resurgence.
Rightmove Friday said it is on track to beat 2009 market expectations. Net profit edged up to 13 million pounds from 12.6 million pounds a year earlier. On a pretax basis, first-half pretax profit fell to 18 million pounds from 19.7 million pounds a year earlier.
Sales in the half fell 11% to 33.6 million pounds from 37.8 million pounds, in line with analysts' expectations.
The firm has been reasonably well protected from fewer property sales and falling house prices as it has benefited from advertisers switching to online from traditional print media, such as local newspapers.
Average spend per customer rose by 1% to 305 pounds in the first half, ended June 30. The firm plans to win more business from local newspapers by encouraging estate agents to promote their brands through its site.
"Early next year we will look to increase our prices again, driven by the compelling benefits of the online proposition," Ms. Williams said.
The firm also enjoyed the busiest day of its nine-year history this month, with page impressions of 22.6 million on Aug. 10. It said Web site traffic also remained strong from May to July, when in previous years visits to the site in those months had typically fallen.
Even if the recent pick-up in activity slows, Rightmove remains upbeat. It said the number of estate agents in the market appears to have stabilized and it now has more estate agent members than at the start of the year.
"There was a huge shake-out in June, July and August, running through to February this year, but since then we've been growing our estate agency membership as estate agents have reported a considerable upturn in activity, although it's obviously still at well below normal levels," Commercial Director Miles Shipside said.
