Rightmove (LSE:RMV) raised its Earnings growth target for 2026 on 6 November, but trimmed Revenue expectations and warned that weak housing conditions would persist into next year.

Rightmove, the UK's largest property portal, delivered a mixed message in its trading update on 6 November. The company raised its target for underlying Earnings Per Share growth in 2026 to at least 7%, from at least 5%, but narrowed revenue growth to 6% to 7%, towards the bottom of the previous 6% to 8% range. The shares fell about 1% to 546.6p on the day.

Underlying operating profit is expected to grow by at least 3% this year. The figure that drew most attention was average revenue per advertiser growth, which was reduced to £100 to £110 from £110 to £120, reflecting weaker spending by new-build developers. Revenue guidance has now been reduced twice in 2026, having originally stood at 8% to 10% before being lowered in July.

About the company

Rightmove operates the UK's largest online property portal, where estate and letting agents and new-home developers advertise homes for sale and rent. Millions of home hunters use the website and app each month, and that audience is the main attraction for advertisers. The company charges agents and developers monthly subscription fees, so its revenue is largely recurring and is driven by the number of advertisers and the average revenue per advertiser.

Beyond the core listings business, the group is building newer lines in commercial property, mortgages and rentals, and investing in artificial intelligence products that aim to improve the way buyers and agents find each other. These areas are expected to grow faster than the core, although they also reduce Margin in the near term because of the cost of development.

The financial profile has historically been one of high margins and cash generation, with little debt. For 2026 the company has targeted underlying earnings per share growth of at least 7%, revenue growth of 6% to 7% and underlying operating profit growth of at least 3%. It plans to return more than £400m to shareholders between July 2026 and July 2027 through dividends and buybacks.

Housing market strains

The company set its guidance against a noticeably softer property market. Average five-year fixed Mortgage rates reached 5.5% at the end of October, up from 5% in June. Resale buyer Demand was 10% lower than a year earlier, agreed sales were down 9%, and average house prices were 0.3% below their level 12 months ago. Developments on site at the end of October were 6% lower than in December 2025, and new homes revenue is expected to fall below 2025 levels.

Management told investors that challenging conditions would persist into next year. There were some encouraging signs in the core business, however, with estate agency partner retention reaching 92% at the end of October, the second-highest level in a decade.

For 2027, assuming current conditions continue, Rightmove (LSE:RMV) expects revenue growth similar to 2026, underlying operating profit growth of 4% to 7%, and underlying earnings per share growth of at least 10%. Average revenue per advertiser is expected to rise by £100 to £110, with core membership broadly flat and Operating Margin of at least 67%.

A portal model tied to housing activity

Rightmove does not take a share of property transactions, so its income depends less directly on the number of homes sold than on how many agents and developers choose to pay for advertising. This makes it more stable than the housing market itself, but it is not immune, because developers cut spending when sales slow and agents come under pressure when fewer transactions are completed.

Average revenue per advertiser is therefore a central measure. It depends on the products purchased, such as premium listings and tools, and on annual price changes. Agent retention gives a useful indication of the health of the customer base, and the level reported at the end of October was close to a ten-year high.

What the outlook implies for property-related companies

The cautious tone offers wider evidence on the state of the UK housing market. Higher mortgage rates, lower buyer demand and fewer agreed sales feed through to estate agents, mortgage lenders, housebuilders and other businesses linked to moving home, even if the effects differ by company.

Further steps to watch include mortgage pricing, developer sentiment, the extent to which new products add revenue and the use of borrowing to fund buybacks. The full-year results in early 2027 should show whether guidance has been met and whether conditions have begun to improve.

Investment and Capital returns

The margin guidance reflects a decision to invest in artificial intelligence products and newer Business lines in commercial property, mortgages and rentals, which are expected to grow by 20% to 30%. That spending is expected to cost up to three percentage points of margin, compared with 70% in 2025.

Rightmove (LSE:RMV) has kept its plan to return more than £400m to shareholders between July 2026 and July 2027 through dividends and buybacks. About £125m had been returned after the update, comprising a £30m interim Dividend and £95m of buybacks, with a further £80m of repurchases planned by December. Around four percentage points of the 2026 earnings growth comes from a lower share count rather than from profit, and some of the buyback is funded through a revolving Credit facility, a shift for a business that has historically carried little debt.

Share price action in the days around the update was notable. The stock closed at 563.8p on 4 November, a 20-session high following a gain of 4.7% that day and a rise of about 22% over the previous month, which left the shares with some ground to give back when the update arrived.

The outlook depends heavily on mortgage pricing and on developer confidence, neither of which is within the company's control. The next significant milestone will be its full-year results in early 2027, by which point investors should have a clearer view of whether the housing market has begun to stabilise.