Rightmove reported a tough housing market on Wednesday. The company pointed to rising mortgage rates and fewer new home developments. The average five-year fixed-rate mortgage hit 5.5% at the end of October, up from 5% in June. The Bank of England's recent rate hike has made it harder for home buyers, affecting consumer confidence.
Key Details
The property portal noted that demand for resale properties fell by 10%. Sales agreed dropped by 9% in the four months leading to October. The number of new home developments also declined by 6% compared to last year. Rightmove lowered its revenue growth forecast for 2026 to between 6% and 7%. This is down from a previous estimate of 6% to 8%. The company also cut its guidance for average revenue per advertiser from £120 to £110. This change reflects reduced spending from housebuilders.
Background
Despite these challenges, the Government's new First Homes scheme has raised optimism among housebuilders. However, Rightmove does not expect a significant increase in new home volumes until 2027. Chief Executive Johan Svanstrom highlighted the company's focus on innovation and artificial intelligence. He said, "After a meaningful step up in capability, we have a well-invested, AI-ready platform."
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Rising mortgage rates and falling home sales could impact the housing sector and real estate investments. Higher borrowing costs may lead to less demand for residential properties. This could affect related stocks and indices. Investors will keep an eye on further developments in the housing market and any changes in monetary policy from the Bank of England.
Based on reporting by: standard.co.uk