Rightmove revenue to be hit further as it extends agent discounts

From April, the company gave all the agents on its portal a 75% discount on their subscription fees for four months to help weather the impact of the coronavirus pandemic. For agents in England, where the property market reopened in May, this discount will be reduced to 60% for August and 40% for September, it said.

For agents in Wales and Scotland, the discount will remain at 75% for August and reduce to 60% for September. The Welsh property market started to reopen on Monday, while the market in Scotland is set to reopen on 29 June.

As a result of the discounts being extended, revenue for the year to the end of December 2020 will reduce by a further £17m to £20m, on top of the £65m to £75m impact of the discount for the period from April to July.

"Despite the positive consumer reaction to the re-opening of the housing market, it takes three months on average for housing transactions to complete which impacts the cash flows of our agents," it said. "It will also take time for agents to build a pipeline of vendors and new sales instructions."

Rightmove said demand has been "strong" following the reopening of the housing market, with ten of its busiest days ever on the platform since 13 May.

However, membership numbers have declined since the beginning of the year, mainly from lower stock agency customers experiencing cash flow issues, exacerbated by the shock of the pandemic. Overall membership at the end of May was down 3.8% since the end of 2019 to 19,054, Rightmove said.

Chief executive officer Peter Brooks-Johnson said: "I’m encouraged by the strong bounce back in home hunter demand since 13 May as England starts to move again and we look forward to welcoming our Scottish and Welsh customers back to the market. Rightmove is committed to continuing to innovate to make home moving easier and to play our part in supporting our customers’ long-term success."

At 0930 BST, the shares were down 3.4% at 569.20p.

Russ Mould, investment director at AJ Bell, said: "The question for Rightmove is whether it can return to the level of fees charged pre-coronavirus and therefore to its previous levels of profitability. The company was already losing agents before the pandemic and this trend is continuing, with its immediate response to the crisis drawing fire from the industry.

"Rightmove continued to grow through the financial crisis and arguably its proposition is even more important in a downturn as clients become increasingly desperate to sell homes."