UK property portal Rightmove sees fewer house hunters as market slows

FILE PHOTO: A rainbow forms over terraced housing during a rain storm in south London

By Aby Jose Koilparambil and Suban Abdulla

(Reuters) -UK real estate portal Rightmove gave further evidence of a slowdown in the housing market on Friday saying fewer people were searching for properties on its platforms as it posted an annual profit in line with expectations.

Shares in the company, which runs the UK's largest property website, slipped as much as 3.7% to a seven-week low of 540 pence in morning trade and the stock was the top percentage loser on the blue-chip FTSE 100 index.

Activity in the UK housing sector has eased in recent months, hurt by a dent in demand for new homes as higher home-loan rates and broader recession fears drive away prospective buyers.

The London-headquartered firm said there were more than 2.3 billion visits to its platforms in 2022 but that was down 8% from a year earlier, with an 11% fall in time spent searching for properties.

"While a cooling market does not affect Rightmove directly, it does impact the estate agents it relies on for fees," Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said in a note, adding that the firm might need to generate income in more creative ways in the future if agent numbers continued to fall.

"The softening from the COVID-induced frenetic market towards a more normal market earlier in the year was disrupted in the final few months by the unexpected rapid mortgage rate increases," Chief Executive Officer Peter Brooks-Johnson said in a statement.

Still, the company's Average Revenue Per Advertiser (ARPA) rose 11% to 1,314 pounds ($1,573.25) per month from 1,189 pounds a year earlier.

The company posted an operating profit for the year ended Dec. 31 of 241.3 million pounds, compared with company-compiled average analysts' estimates of 242.2 million pounds.

($1 = 0.8349 pounds)

(Reporting by Aby Jose Koilparambil in Bengaluru and Suban Abdulla in London; Editing by Sherry Jacob-Phillips and Elaine Hardcastle)