Rightmove relying too much on HIPS for future revenue

Rightmove, the property website, shares may have slipped last week, however, the company is still trading on a price-earnings ratio of more than 100. Even judged against the excesses of the dotcom boom that is an impressive rating.

Much of the "hope" value in the share price stems from the belief that Rightmove will profit from government plans to simplify the house-buying process.

Under the government plan, from June 2007 sellers will have to prepare a home information pack that includes basic legal documents and a mini survey.

Rightmove believes it is well placed to sell home information packs to its customers. In fact, by 2008, UBS, the company's broker, expects the packs to generate £360m of £400m forecast turnover.

But many in the industry expect the government timetable to slip, and there is talk that the reports could be made voluntary.

Even more worryingly for Rightmove, in a rare -- but almost unnoticed -- policy announcement last week, David Cameron, the leader of the Conservative party, said he would scrap home information packs if elected.

Rightmove's hopeful shareholders are no longer just gambling on the abilities of the company's management team to deliver -- they are also betting against the Tories winning the next election.