Rightmove (LSE:RMV) on Friday raised its earnings outlook, offering investors some reassurance just as this week’s UK interest rate rise adds another hurdle for the housing market.
The online property portal now expects underlying earnings per share to grow by at least 7% this year, up from its previous target of at least 5%. But the upgrade comes with a more cautious message on trading: buyers are holding back, mortgage costs have climbed, and housebuilders are spending less.
Revenue growth is now expected to come in at 6–7%, within the previously guided 6–8% range. Underlying operating profit growth is expected to reach at least 3%, at the bottom of the earlier 3–5% forecast.
The earnings upgrade is welcome, but it does not signal an improvement in the underlying property market.
Thursday’s Bank of England decision has made that backdrop more challenging, as policymakers raised Bank Rate by a quarter of a percentage point to 4%, as higher energy costs threaten to push inflation from September’s 3.5% to around 5% by the middle of next year.
For housing, the pressure was building well before the announcement. The Bank’s latest report showed mortgage approvals for house purchases fell 8% in the three months to September compared with the preceding quarter, with higher borrowing costs weighing on demand.
Rightmove’s figures tell a similar story. The average five-year fixed mortgage rate rose to 5.5% at the end of October from 5% at the end of June. Its update reported buyer demand down 10%, and sales agreed down 9%, while average house prices were 0.3% below a year earlier.
The risk for the sector is that borrowing costs stay elevated, squeezing buyers’ budgets and persuading more households to postpone a move. That could leave estate agents handling fewer transactions and developers working harder to secure sales.
Rightmove has some protection because its core business charges property professionals subscriptions to advertise, rather than collecting a commission each time a home changes hands. Even so, weaker customer finances can constrain spending on its services.
That is already visible in New Homes, where revenue from the division is expected to fall below 2025 levels, with development volumes down 6% since December. Expected growth in average revenue per advertiser has been cut to £100–£110 from £110–£120, entirely reflecting reduced developer spending.
The estate agency business looks steadier. Guidance for membership and average revenue per advertiser is unchanged, while partner retention of 92% was the second-highest in a decade.
Rightmove also continues to target 20–30% revenue growth across its Commercial Property, Rental Services and Mortgages businesses.
Shareholder returns remain substantial, given that since the end of July, the company has distributed approximately £125 million through dividends and buybacks, partly funded by its revolving credit facility. Another £80 million of buybacks is expected before year-end.
Looking into 2027, Rightmove assumes current market conditions will persist.
It expects similar revenue growth to this year, underlying operating profit growth of 4–7% and underlying earnings per share growth of at least 10%.
That leaves investors weighing a resilient subscription business and sizeable cash returns against a housing market where affordability is becoming harder to improve.
