Rightmove raises hopes of a revival

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Hopes of a revival in the house market were fuelled after property website Rightmove reported a 20 per cent jump in traffic so far this year.

The stronger level of interest from prospective buyers has resulted in a series of record days, even though the number of estate agents and developers advertising on the site has been flat on a year earlier.

That matched the trend seen last year, with Rightmove driving a 23 per cent rise in full-year operating profits to £69.4m in 2011 by persuading customers to spend more on buying additional advertising products.

The number of advertisers grew by 1 per cent to 18,276 last year but the average revenue per advertiser lifted 17 per cent to £443 a month, the FTSE 250 Index company added.

Managing director Ed Williams said the performance reinforced expectations that this year will see the property industry’s spending on internet advertising exceed that on local newspapers for the first time.

The company added: “The Rightmove business model has proven to be remarkably resilient in the unprecedented downturn in the property market experienced in 2008.

“We have been able to grow significantly even in the difficult housing market thereafter.”

It is facing increased competition after Digital Property Group, which is owned by Daily Mail & General Trust and has the brands FindaProperty.com, Propertylocation.com and Globrix.com, announced plans to merge with Zoopla.com.

The deal is under review by the Office of Fair Trading but if approved it would bring together the next three largest property portals under a single owner.

Numis Securities analyst Dominic Buch said the results were slightly ahead of expectations, with the product bundling strategy continuing to be popular with customers and result in a significant increase in average spend.

He added: “We believe the monetisation of mobile and the new local valuation alert service... provides material medium-term upside.”