R e a d i – M o v e . c o m

The UK’s biggest property website today said this year’s mini-revival in the housing market was gradually drawing back advertisers to the business.

The number of advertisers on Rightmove’s website stood at 17,600 at the end of October, up 5 per cent from the depths reached in February.

Rightmove said it was being helped by an 8 per cent rise in estate agency and lettings memberships to 14,100 since the end of January, as well as an upturn in the number of schemes from housebuilders.

Mini-revival: Homebuyers are being tempted back to the market

Although housing associations are suffering from weaker Government funding – dampening overall development numbers – it counts all of the largest mainstream developers among its advertisers.

Meanwhile, home hunters are being tempted back into the market by record low interest rates – prompting the first year-on-year growth in house prices for 18 month in October according to building society Nationwide.

Rightmove said page impressions on its website between July and October were 35 per cent ahead of the same period last year – including a record 600 million impressions in August – helped by a television advertising campaign as well as signs of recovery.

The company’s website receives around 40million visits a month on average and has around one million properties for sale or rent.

The number of enquiries generated for advertisers was also up 60 per cent over the period.

Despite tough conditions in holiday rentals and overseas home sales, Rightmove has also made £5million in savings and kept a tight rein on costs.

Shares rose 2 per cent today as it said it was confident of meeting market expectations this year and further progress in 2010.

Collins Stewart analyst Robin Savage said he expected Rightmove to be the ‘main beneficiary’ of the shift in property advertising online away from newspapers.

‘By 2015, we expect advertising spend to double and the online share to double,’ he said.

Collins Stewart predicts Rightmove to post underlying earnings of £41.5million this year, slightly below 2008′s £42million.

Homebuyers are outnumbering sellers by a ratio of five to one, creating a price bubble, it is claimed today.

The figures come after further signs of a mortgage price war among banks and building societies.

The National Association of Estate Agents said the average estate agent branch had 287 house hunters on its books in October compared with only 57 properties for sale.

Homebuyers are outnumbering sellers by a ratio of five to one

‘This demand is pushing house prices up,’ it said.

The gap between asking and selling prices has fallen from 10.9 per cent to 8.8 per cent in a month. 

The stabilisation of the housing market has been helped by the return of some first time buyers and the Government’s stamp duty holiday.

It lifted the threshold at which the duty applies from £125,000 to £175,000 a year ago, but this measure will be dropped next month.

Gary Smith, the association’s president, said: ‘There is strong demand for property and more optimism in the housing market than we have seen for months.

‘This is good news for the recovery of the market and for the UK economy in general.’

He urged the Government and the banks ‘to do more to keep the momentum of market recovery going’, including extending the stamp duty holiday ‘for an indefinite period’.

Yesterday, the Nationwide, the country’s biggest building society, announced that it is reducing rates on 19 home loan deals by up to 0.31 per cent. This is the latest in a series of cuts by the society.

Northern Rock yesterday cut its mortgage rates for the fourth time in just over a month. It is reducing rates on 13 of its fixed rate and tracker deals by up to 0.5 per cent.

Abbey cut the cost of its fixed rate and tracker mortgages by up to 0.3 per cent.

Property values rose 0.4 per cent this month, taking the annual price rate into positive figures for the first time since March 2008, according to the Nationwide Building Society.

The average value of a UK house is now £162,038 after six months of rises in a row, helping year-on-year prices grown by 2 per cent in October.

But the figures showed a slowdown in the pace of the increase following buoyant summer months, down from 0.9 per cent in September and 1.4 per cent in both July and August.

House prices rose 0.4 per cent in October, taking overall values into the black for the first time since March 2008

Nationwide said the ease in monthly growth may signal that more properties are coming on to the market.

Martin Gahbauer, Nationwide’s chief economist, said: ‘A moderation in the rate of house price inflation was to be expected, as the very strong monthly increases seen over the summer months were unlikely to be sustainable over the long run.’

He added: ‘Although too early to tell for sure, it may also reflect a more natural level of stock available for sale coming to the market, alleviating some of the extreme shortages of property on the market seen during most of this year.’ 

Today’s figures are consistent with borrowing data out yesterday that showed a slowdown in activity, with net mortgage lending last month – up by £922 million – easing in comparison with August.

Nationwide warned the UK’s failure to lift out of recession in the third quarter may further hamper the housing market recovery.

A deeper and longer recession could lead to higher unemployment and subdued wages, which could hit property prices, according to the group.

But the fall in third quarter gross domestic product has also increased the likelihood that interest rates will stay low for some time in a possible boost to property conditions.

‘As a result, mortgage affordability will remain relatively favourable for both new and existing borrowers – this should limit the number of distressed sales and cushion the negative impact of labour market weakness on housing demand,’ Mr Gahbauer said.