Lockdown easing and a stamp duty holiday. I’d invest in the Rightmove share price right now!

A rebound in the property market should be a stimulant for the Rightmove share price, making Jonathan Smith keen to buy-in now for the long term.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The coronavirus has negatively impacted a lot of industries. One of these has been the property sector. For those looking to move, it was impossible to have physical viewings for months. The government actually warned against moving during parts of the pandemic. For investors, property prices didn’t offer any better news. Nationwide reported prices falling the most in May since 2009, at a 1.7% drop. Naturally this took a toll on the revenues of any firm involved in the property space, including Rightmove (LSE: RMV) and its share price. So why buy now?

A turning tide

We all know how quickly things can change, as seen in March. On the flip-side, it doesn’t take much for positive change to come into effect. The first sign of encouragement for Rightmove was the announcement on a stamp duty holiday. The Chancellor gave the green light a month ago for no stamp duty to be paid on the first £500k of a property price. This has encouraged buyers to come back to the market, given that it would save around £15k for a £500k property.

The second positive change that will help the Rightmove share price is the easing of restrictions from the coronavirus. How can you move house or view a new house if you are told to stay within your own home for safety? But with the UK registering fewer than 1,000 new cases a day since July 15, restrictions have been eased. Hence the housing market springing back into action.

Boosting the Rightmove share price

Rightmove is an online portal where estate agents list properties. It relies on internet traffic and agents advertising on the portal. Before the tide turned, the share price was falling as investors realised the business would see a slowdown. This was confirmed with its results for the first half of the year. Average revenue per advertiser fell 34%, and there was a similar move lower on overall revenue and profit.

Those figures were through to the end of June,but I expect the next half to be a different story. Rightmove commented that it’s seeing a lot of pent-up demand. Its CEO said “it’s quite incredible that 65 of our record days have been since 13 May”.

I’m not going to claim that the property market (and therefore the Rightmove share price) is going to be the best performing sector over the next year, but I do think it’ll be up there. As a starting point, a bounce-back in revenue for Rightmove should put the share price back close to where it was before the virus. This would return around 12% from current levels.

From there, the share price can resume the growth stock performance we’ve seen over the past few years. In case anyone has forgotten, it has gained over 1,000% in the past 10 years. It was only the virus that put a brake on performance. So from my point of view, this is a great time to buy into the Rightmove share price and ride the wave back higher. 

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

jonathansmith1 has no position in any of the shares mentioned. The Motley Fool UK has recommended Rightmove. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

2 tempting cheap shares to consider buying for long-term returns and growth

These cheap shares are being held back by wider market issues. Buying some now could be a shrewd move ahead…

Read more »

Investing Articles

Could Premier African Minerals be a millionaire-maker penny stock?

Shares of Premier African Minerals (LSE:PREM) have crashed over the past year. Is this a golden opportunity for me to…

Read more »

British flag, Big Ben, Houses of Parliament and British flag composition
Investing Articles

Which FTSE defence stock should I buy? Here’s what the charts say

FTSE shares like BAE Systems have been flying higher over the last couple of years as the geopolitical situation has…

Read more »

Shot of a senior man drinking coffee and looking thoughtfully out of a window
Investing Articles

Here’s why investors should consider buying Scottish Mortgage shares today

After a steady rise in recent times, this Fool thinks Scottish Mortgage shares could be worth considering. Here he explains…

Read more »

Young black man looking at phone while on the London Overground
Growth Shares

This FTSE 250 stock keeps blowing broker forecasts out of the water

Jon Smith considers the ever-increasing share price targets for a FTSE 250 stock that has risen by 120% in the…

Read more »

A mixed ethnicity couple shopping for food in a supermarket
Investing Articles

Marks and Spencer shares could rise 29%, according to this broker

Marks and Spencer shares currently sport a P/E ratio of just 10, and one well-known City broker believes the company…

Read more »

Smart young brown businesswoman working from home on a laptop
Investing Articles

2 of the best FTSE 100 beginner stocks to consider buying

The Footsie offers people just beginning their investment journey some of the best stocks to buy. Here are two to…

Read more »

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop
Investing Articles

Here’s why the Aviva share price suddenly dived

The Aviva share price suddenly dropped by over 6% the other day. But there's a simple explanation for this sudden…

Read more »