Rightmove, the UK's largest property-listings platform, is bracing for a slower housing market, warning that higher interest rates and weaker demand for new homes will keep growth muted well into 2027. The company cut its 2026 revenue growth forecast to 6%-7% from a previous 6%-8% range and said it now expects average revenue per advertiser (ARPA) to stay flat in 2027 as homebuilders trim their advertising budgets.
The warning comes just days after the Bank of England raised its benchmark interest rate, a move that makes mortgages more expensive and typically cools housing transactions. For Rightmove, which earns most of its money from subscription-style fees paid by estate agents and homebuilders to list properties, a slower market usually means advertisers tighten their spending.
What is ARPA and why does it matter?
ARPA, or average revenue per advertiser, is a key metric for Rightmove. It measures how much, on average, each paying customer generates in revenue. When ARPA rises, Rightmove can grow its top line even if the number of advertisers stays flat. When ARPA stalls, revenue growth depends almost entirely on adding new customers, which is harder in a sluggish market.
Rightmove now expects ARPA to come in at £100-£110 for 2026, down from its earlier forecast of £110-£120. For 2027, it sees ARPA flat, as homebuilders—who have been a major source of advertising spend—pull back. The company also said it expects adjusted operating profit growth to land at the low end of its 3%-5% range.
Peel Hunt, a UK brokerage, noted that ongoing investment in technology and new product launches could support pricing over time, but the near-term picture is clearly more cautious.
Why the housing market is cooling
The Bank of England's rate hike on Thursday is the latest in a series of increases aimed at curbing inflation. Higher rates push up mortgage costs, reducing how much buyers can borrow and, in turn, how much they can afford to pay for a home. That typically leads to fewer transactions and slower price growth.
For homebuilders, the impact is twofold: they sell fewer new homes, and they may also cut marketing spend to protect margins. Since Rightmove relies heavily on homebuilder advertising, any pullback directly hits its revenue.
The broader UK housing market has been under pressure for some time, with affordability stretched and buyer confidence fragile. While a rate cut later this year could provide some relief, Rightmove's guidance suggests the company expects the slowdown to persist into 2027.
What it means for investors
For investors, the key takeaway is that Rightmove's growth engine is slowing. ARPA has been the company's main lever for growth: when it rises, revenue can climb even without more listings. If ARPA stalls, as the company now expects, top-line growth will likely slow, and costs—especially technology and product development—may not fall in step.
That dynamic can flip operating leverage from a tailwind to a headwind. In good times, Rightmove's high-margin model means extra revenue drops mostly to the bottom line. In a downturn, fixed costs remain, so profit growth can lag revenue growth. The company's guidance for adjusted operating profit growth at the low end of its 3%-5% range reflects that pressure.
Investors should also watch for any future revisions to ARPA, as that metric is more sensitive to market conditions than the headline revenue growth target. A further cut would signal deeper weakness, while a stabilisation could be an early sign of recovery.
Rightmove's situation is not unique. Other companies that depend on advertising or transaction volumes are also feeling the pinch from higher rates. For example, Nine Entertainment recently lifted its cost-cut target as TV ad revenue slid, and Dutch Bros saw its stock drop 21% after a disappointing growth outlook. In the UK, the housing market's fate is closely tied to the Bank of England's next moves, and wage growth elsewhere is also influencing central bank decisions.
For everyday investors, the lesson is that property-related stocks are sensitive to interest rates. When rates rise, expect slower growth and lower profit margins. Rightmove's guidance is a clear signal that the UK housing market is not out of the woods yet.
As always, it's important to consider how a company's outlook fits into your broader portfolio. Rightmove remains a dominant player in its niche, but its near-term growth prospects are now more muted than many had hoped.
