Tweet
Rightmove, Britain's biggest property website, announced a 20% cut in staff numbers yesterday as it warned the housing slump would last well into next year.
The move, part of the portal's plans to cut costs by £5m, came as the British Bankers' Association (BBA) revealed that UK mortgage approvals in September were 57% down on the same month last year.
About 60 of Rightmove's 300 staff face redundancy as the company scales back its overseas business in response to dwindling demand. The group's website lists more than 50,000 properties in 100 countries, including Spain and the US.
Rightmove, on which 90% of UK estate agents advertise, expects "current challenges [to] continue through 2009". It added it had plans for "greater focus on national and regional housebuilders as well as the growing housing association market, with less focus on more speculative individual developments and property conversions". Shares in Rightmove fell 8.8%, extending the decline this year to almost 57%.
Miles Shipside, the company's commercial director, said the sluggish market had forced many estate agents to cut costs.
"Some people say that sales are at their lowest for 30 years," he said. "Volumes are bumping along the bottom and it's a particularly deep trough we're in. But I think that we're at the bottom of it now."
Rightmove is likely to face increased competition from Property Live, a housing search website run by the National Federation of Property Professionals, which went live this week.
Peter Bolton-King, chief executive of the National Association of Estate Agents, said the market was patchy. "Some of our members are struggling like mad, others are saying it's not brilliant but it's OK. Lots are looking at costs and cutting back on advertising because they are spending many hundreds of pounds on property portals. That was one of the reasons we launched our own portal. We didn't do it to pose a threat to Rightmove but because our members asked us to."
Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, described the sales figures as "pretty grim". "If transactions are running at about one a week, that clearly has implications for the business and you can come to your own conclusions about what the future is going to be. But this isn't going to be an isolated story. I would question whether we can support the number of people in the industry on the number of transactions going on."
The BBA said 23,422 mortgages were approved for purchases in September, against 53,694 in the same month last year. The 10% rise between August and September this time brought the figure back from a record low of 21,342.
guardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More Feeds
More...
