Rightmove takes extra hit of up to £20m after extending price cuts for agents

Property website Rightmove has warned it will take another hit of up to £20 million as it cuts prices for estate agents to help them weather the coronavirus crisis.

The UK’s biggest property portal revealed revenues would be knocked by between £17 million and £20 million after it said it would continue to offer agents discounts throughout August and September.

This is on top of the £65 million to £75 million sales blow suffered due to discounts given between April and July.

But Rightmove said there are signs that the housing market is reviving after lockdown, with sales agreed currently more than 10% higher in England than a year earlier.

It said it had seen its 10 busiest days ever on the platform since the housing market reopened in England on May 13, with property listings more than 10% higher over the past week than a year earlier.

The group said some of this was due to pent-up demand during the lockdown, and stressed it was unclear if the momentum would be maintained.

Shares in Rightmove were around 4% lower in early trading.

Chief executive Peter Brooks-Johnson said: “I’m encouraged by the strong bounce-back in home-hunter demand since May 13 as England starts to move again, and we look forward to welcoming our Scottish and Welsh customers back to the market.”

The group said membership was 3.8% lower since the end of 2019 at 19,054, with the drop comprising 620 agency branches and 135 New Homes developments.

Traditional estate agents have proven more resilient, according to Rightmove, with members down around 2%.

Harry Read, an analyst at Liberum, said: “We believe the extension of the discount is the correct strategy, as the key to maintaining top line growth in the longer term is keeping agents in the market with a view of restoring ARPA (average revenue per advertiser) growth once Ccoronavirus restrictions have been lifted.”