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Rightmove downgraded as bank warns of agency closures accelerating

Investment bank RBC Capital has downgraded its rating of Rightmove and is warning that the property market is entering a prolonged downturn with agency closures on the horizon.

The bank has cut Rightmove's share price target from 550p to 440p.

In an advice note to investors it warns: “The likelihood of an immediate, sharp impact on the property market from Covid-19 extending into a drawn-out period of weakness has increased, in our view. As such, we expect an acceleration in estate agent closures and greater pressure on Rightmove’s Average Revenue Per Agent [ARPA, a key measure] near term.”


It goes on to say: “Rightmove’s pricing power may be undermined by a downturn. Rightmove’s ARPA has increased almost four-fold in the last 10 years and now represents circa five per cent of an agent’s revenue … 

“We are concerned that this degree of price rises many not be sustained going forward, particularly in light of negative press coverage Rightmove continues to receive from disgruntled agents and more aggressive competition from number two player Zoopla.”

In its most stark warning to the industry as a whole and the leading portal in particular, the bank continues: “The Covid-19 crisis may act as a catalyst forcing agents out of business and undermining Rightmove’s ability to resume annual seven to 10 per cent prices rises in the future.”

The bank assumes that Rightmove’s current discount given to agents during the virus crisis will impact seriously on revenue, and it anticipates a six per cent decline in the number of advertisers. 

This compares to a 13 per cent fall during the credit crunch over a decade ago.

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    Down to Rightmove! the pol pot of property portals, it’s on its last legs with no user satisfaction and no market place to manipulate!

    How the shitey have fallen.

  • Hit Man

    Rightmove have bitten the hands that feed them, without them the industry will be better off.

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    • 17 April 2020 10:27 AM

    I'm afraid there will be a very large cull of EA and LA.
    There simply ISN'T and won't be sufficient business for all the existing players to survive for years to come.
    For a start there are simply too many EA and LA already.
    Consolidation would be useful for the market leaving more effective and viable EA and LA. Along with reduced numbers of property portals or at least the ones that charge.

    If those remaining could organise their own websites in a sort of co-op portal then the listings could be accessed by anyone.
    Would save EA and LA millions and put the listings portals out of business.

    It would obviously make sense if every LA and EA signed up to use the same form of web site template.
    Could call the colkective

    The Property Agents

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    Won't happen...end of the day agents will never work together unless they see an easy buck

    • 17 April 2020 16:07 PM

    Yep agree as for LL trying to get EA and LA to act cohesively is akin to herding cats.
    This is how these portals are able to price gouge industry participants.
    By refusing to co-operate with eachother it is costing them millions.
    LL; LA and EA refuse to work together and are exploited as a result.
    They are in effect their own worst enemies.

    It seems none of them will ever learn and consequently will continue to be exploited by the likes of Rightmove etc.

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    Rightmove's stranglehold on estate agents are at an end. They need to reduce their fees in line with other portals. And their arrogance in trying to bully agents into deferring payments badly back fired on them.


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