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Graham Awards


Rightmove 'may go easy on fee increases to agents' claims City analyst

City investment consultancy Jefferies has suggested that Rightmove ‘may go easy’ on increasing its charges to agent customers, because of the state of the housing market. 

The latest note to investors from Anthony Codling suggests that the UK housing market is in an unusual bind because on the one hand there is a relative shortage of stock to sell, but on the other hand the usual ‘counter-cyclical’ movement of rents upwards is not taking place.

“Rightmove's model remains robust, but while its customers are in pain we suspect that it may choose to rub ointment rather than salt into their wounds” says Codling.


“We suspect that Rightmove may go easy on the ARPA [average revenue per account] increases over the next couple of years. While on the one hand it believes that by charging its customers more, it saves them money (by delivering efficiency gains), there is a balance to be struck” Codling continues.

“The theme of Rightmove's full year 2016 results was that they've only just begun, but it certainly doesn't want to bite the hand that feeds it so hard that the agent prematurely has their own last meal. ... [Rightmove] has its cake and enjoys eating it, but it may well benefit from saving some of its cake.”

Codling predicts that having made record profits in 2016, the portal may well decide this is not the time to pile additional financial pressure on agents.

He says bad news comes in threes and right now agents are “having a torrid time” with transactions subdued thanks to Brexit worries, stamp duty issues and what Codling refers to as “unrealistic price expectation woes.”

As a consequence, he says one thing may happen: “Florence Rightmove-gale to the rescue."

Jefferies has given its investor clients a ‘hold’ status for Rightmove shares, although it has slightly lowered its expectations for the shares’ price target.

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    So it's because of the state of the housing market, rather than not wanting to fleece customers any more. Thanks, Rightmove, I'm sure everyone will appreciate that sentiment.


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