Shares in Rightmove, the operator of the UK’s largest housing website, fell almost 7 per cent this morning, on reports it may face new strong competition and further housing market woes.

According to weekend press reports, the National Association of Estate Agents (NAEA) is to launch a free rival property website that would threaten Rightmove’s dominant position.

For a membership fee of £175 a year, the NAEA will allow its 10,000 members to advertise properties for sale or rent at no extra charge, whereas Rightmove, which currently has around 80 per cent of total property page views on a monthly basis, charges £495 for an estate agent to advertise.

Analysts said that although it would be difficult for a newcomer to break into the market and it was unlikely that estate agents would risk cancelling their Rightmove subscription, the website may face price pressure.

The company was also hit by its latest survey that said house prices were continuing to fall, with sellers asking £5,403 less for their homes than they were a month ago. It also showed the average asking price for a property down, on average, by 2.3 per cent to £229,816.

Rightmove shares fell 22.25p to 297.75p.

The FTSE 100 fell 11.2 points to 5443.6, as Rightmove’s gloomy survey, combined with downbeat broker comments, hit bank stocks.

Analysts at Lehman Brothers said they remained negative towards UK banks, adding that impairment charges are likely to increase as the economic slowdown deepens.

Lloyds TSB fell 5.75p to 306p, HBOS lost 0.75p to 302.25p, and Royal Bank of Scotland was down 3p to 229.75p.

Big oil users, such as British Airways, down 5.5p to 255.5p, and cruise ship operator Carnival, down 57p to £19.28, fell as oil rose above $114 a barrel on worries of a potential supply threat from tropical storm Fay to oil and gas production in the Gulf of Mexico.

However, BHP Billiton rose 17p to £15.46, after posting record annual profits. Anglo American, up 67p to £28.02, Rio Tinto, 75p higher at £46.80, and Vedanta Resources added 26p to £17.48, tracking higher commodity prices.

In the FTSE 250 Michael Page gained 31.25p to 348.75p after reporting a 22 per cent rise in first-half profits and comments from potential suitor Adecco reiterated its interest in the company.

Explore Markets

• United States

• Europe

• Japan

• China

• Russia

• The Gulf

• India

• Africa

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive