Rightmove predicts UK property market boom after 2021 record high

The UK property market is expected to see robust demand even in the face of high inflation for 30 years. Photo: Getty

Move right (RMV.L) predicted the UK property market would explode after the busiest year in the site’s 21-year history, which saw profits soar.

The real estate website said it expects transaction levels to return to pre-COVID levels this year, allaying concerns about a slowdown in the national real estate market.

Rightmove, the UK’s largest property site, expects robust demand even in the face of 30-year high inflation, helped by firm house prices in an undersupplied market and the UK dropping all measures pandemic.

The FTSE 100 (^ FTSE) recorded a 67% year-on-year (YoY) increase in annual pre-tax profit to £226m ($302.3m) for the year ending 31 December 2021, while revenue jumped nearly 50% to £305m.

Full-year revenue was up 5% from 2019 figures before the pandemic and 48% from 2020 thanks to discounts given to real estate agents during the pandemic.

“As the market normalizes, we expect transaction counts to return to pre-pandemic levels,” Rightmove said in a statement. “We remain alert to the macro environment, but Rightmove is not significantly impacted by the real estate market cycle except in the most extreme circumstances.”

Read more: UK house asking prices jump to a record high of £348,000 in February

The site posted an operating margin of 74% over the period.

The bulk of the group’s revenue comes from agents who pay fees to list homes on its site.

Rightmove said the UK’s online property advertising market “will continue to grow” after average revenue per advertiser (ARPA) soared 53% year-on-year to £1,189 per month and rose 9% per month. compared to 2019 levels.

The real estate site said it reduced steep discounts it offered to agencies and new residential customers in early 2020 at the onset of the coronavirus pandemic.

It announced a final dividend of 4.8p per share for a total payout for 2021 of 7.8p, down from 4.5p in 2020.

Shares jumped 5.3% in early trading Friday morning in London.

Shares of the real estate website rose 5.3% to 648.2p.  Chart: Yahoo Finance

Shares of the real estate website rose 5.3% to 648.2p. Chart: Yahoo Finance UK

The positive outlook for the UK property market follows separate data from Rightmove which showed property asking prices rose 9.5% in February from a year ago as homes came on the market at an all-time high.

Read more: Cost of living crisis: women hit harder by rents than men

Figures show the average asking price rose 2.3% – or £7,785 – this month to a record £348,804, the biggest monthly increase in pounds recorded by Rightmove in over two decades.

Prices are now 9.5% higher than a year ago, the highest annual growth rate since September 2014.

This new record means that average asking prices have now risen by almost £40,000 in the two years since the start of the pandemic, compared to just over £9,000 in the previous two years.

Watch: Will UK house prices ever drop?

Penny D. Jackson