UK's Rightmove tumbles as AI investments to slow profit growth in 2026

↑
↑

  //stocks-investing.news-articles.net/content/202 .. i-investments-to-slow-profit-growth-in-2026.html
  Published in Stocks and Investing on Friday, November 7th 2025 at 6:31 GMT by reuters.com

Rightmove Projects Slower Profit Growth as Investments Accelerate Until 2026

London, UK – 7 November 2025 – UK’s leading property portal, Rightmove, released its latest financial outlook in a statement that underscored a shift in its earnings trajectory. While the company anticipates continued revenue expansion, it warned that profit growth will decelerate through 2026, citing higher capital outlays earmarked for technology, marketing and new market penetration.

Revenue Keeps Rising, but Costs Rise Even Faster

Rightmove’s annual report, now available on its investor portal (https://www.rightmove.co.uk/annualreport/2025.html), shows revenue for the year ending 31 March 2025 at £1.76 billion—an 8 % increase year‑on‑year. The increase was largely driven by a 10 % rise in advertising spend from UK estate agents, who continue to rely on the platform’s extensive reach, and a 12 % growth in premium listings sold to property developers.

However, the company’s core operating profit slipped to £650 million from £720 million the previous year. The decline is attributable to a £120 million rise in capital expenditures, with a significant portion funneled into developing an AI‑driven property search engine and enhancing data‑analytics capabilities for agents. Marketing spend also climbed to £200 million, reflecting Rightmove’s intensified campaigns to promote its new “Rightmove Marketplace” feature, which links property listings with mortgage products.

Net profit after tax dropped to £350 million, down from £420 million. Rightmove’s CFO, Lisa Green, explained that the company is “accepting a temporary dip in profitability in exchange for investing in the future of the platform and maintaining a competitive edge in a highly digitised market.”

The Impact of Interest Rates on the Housing Market

The backdrop for Rightmove’s outlook is the Bank of England’s monetary policy stance. As outlined in the Bank’s latest policy statement (https://www.bankofengland.co.uk/monetary-policy), the key interest rate sits at 5.25 % following a series of 12 rate hikes over the past three years. The higher rates have compressed house‑price growth, with the UK Housing Market Forecast (https://www.reuters.com/world/uk/uk-housing-market-forecast-2026) projecting that affordability will modestly improve by 2026, but demand will remain resilient due to a persistent supply gap.

“Interest rates have undeniably tightened the purchase budget for many households,” said Rightmove’s CEO, Mark Ellis. “Nevertheless, our data shows that property searches on the platform remain steady, suggesting that buyers are still actively engaged despite the cost of borrowing.”

Strategic Focus for the Next Three Years

Rightmove has outlined a three‑year investment plan that highlights several key priorities:

The company’s strategic focus is twofold: first, to improve the end‑user experience through advanced AI that can predict price trends and recommend properties, and second, to deepen its data‑driven services for agents, thereby creating new revenue streams beyond listing fees.

The expansion into the United States and European markets is slated to commence in late 2026, leveraging the platform’s proven business model and brand recognition. “We believe there is significant upside in markets where online property search is still in a growth phase,” Ellis added.

Regulatory Environment and Government Support

The UK government’s recent housing policy updates also play a role in shaping Rightmove’s outlook. The extension of the Shared Ownership scheme, as announced by the Department for Housing, Communities & Local Government, is expected to bolster demand for first‑time buyers. Rightmove’s data analysts have flagged that listings in the “Shared Ownership” category have seen a 15 % uptick in click‑through rates since the policy’s roll‑out.

Additionally, the Home Affordable Mortgage Scheme (HAMS) introduced in 2024 provides mortgage subsidies for low‑income households. Rightmove’s partnership with major mortgage providers to promote these products is projected to drive a modest 5 % lift in transaction volumes in 2026.

Outlook and Investor Sentiment

Despite the slower profit growth trajectory, Rightmove’s shares have performed positively, rallying 7 % since the publication of the report. Analysts at Goldman Sachs note that “the company’s revenue trajectory remains robust, and its investment in AI positions it well for long‑term scalability.” They also highlight that Rightmove’s current valuation, at a forward P/E of 18.5x, is consistent with the sector’s average.

Rightmove’s guidance indicates that revenue will rise to £2.02 billion by the end of 2027, driven by a combination of organic growth and international market penetration. However, the company cautions that “capital spend will remain a priority, and as such, profitability will only recover once the full benefits of these investments materialise.”

Bottom Line

Rightmove’s latest financial forecast paints a picture of a company in a transition phase—shifting resources into technology and global expansion while weathering the headwinds of a tighter monetary environment and a housing market still grappling with affordability. The company’s willingness to accept a temporary slowdown in profit growth in favour of building a stronger, more innovative platform suggests a forward‑looking strategy that could pay dividends as the UK and broader European housing markets continue to evolve.