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- CoStar chief executive Andy Florance has previously criticised Rightmove.
Property is a national obsession and 80 per cent of searches for homes to buy, rent or just dream of are done on Rightmove.
However, powerful hedge funds appear to believe that the property portal’s dominance could be threatened by rival Onthemarket, which is receiving huge investments from CoStar, its US owner.
Investment firms have made record bets against the company through short-selling operations in which traders borrow shares and then sell them.
Is change coming? Powerful hedge funds seem to believe that Rightmove’s dominance may be under threat
The hope is that the share price will fall substantially before the operator has to buy them back to their owner for a fee. Almost 3.5 per cent of Rightmove’s shares, valued at £150m, are on loan.
Rightmove is the ideal choice for home seekers as traffic is expected to increase thanks to Government policies to boost house building and make it easier for first-time buyers to purchase a home.
CoStar chief executive Andy Florance has previously criticised Rightmove, saying the site, which was set up at the height of the dotcom boom in 2000, had “become complacent”.
Sean Kealy, equity analyst at Panmure Gordon, said: “The fear is that Rightmove’s growth will slow or its margins will shrink as CoStar tries to enter the market.”
In the industry, Rightmove is seen to benefit from a very strong and well-established “network effect” – the more properties appear on the site, the more house hunters and tenants are looking for a rental property. This is extremely difficult to replicate or alter.
Rightmove makes money by charging estate agents to list their properties on its platform.
At its recent Investor Day, the property portal said it is ready to expand. It expects revenues of more than £600m by 2028, which would double its current size.
Rightmove declined to comment. Onthemarket was contacted for comment.
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