Foxtons profit slumps by 30 per cent
Estate agent warns of a tough year even if the housing market receives a boost in next month’s budget
UK estate agents Foxtons has reported a 30 per cent slump in profits and is warning of a tough year ahead.
This comes despite the latest survey from lender Nationwide which shows UK house prices are set to continue rising. This month they grew at the their fastest since last July, said Nationwide.
“Early signs are that the sales market may improve during 2020, however we are prepared for further challenging conditions in the sales market and will continue to build our lettings business and manage our cost base in line with trading conditions,” said chief executive Nic Budden.
Foxtons saw profits fall from £3.6m (€4.2m, $4.7m) last year to £2.5m. Budden says any relaxation in stamp duty or increased activity in the market will not negate what he says will be a hard year.
“We expect structural issues such as affordability and stamp duty to hold back sales volumes and there is room for significant improvement in consumer confidence,” he said. “Our sales pipeline is stronger than the same time last year which is positive but our focus remains on lettings and cost control in line with our prudent approach to running the business.”
Last year Foxtons experienced a big drop in the number of sales it facilitated plus a mixed performance on the lettings side. Group revenue was 4 per cent down on 2018 with sales revenue down 10 per cent and lettings income dipping 2 per cent. Mortgage revenue grew 3 per cent.
“We saw fewer high-value sales at the top end of the market, which impacted sales revenue,” added Budden.
The company, which was launched in 1981 and floated in 2013, said there will be no final dividend. Foxtons shares fell 5 per cent in early trading.
FURTHER READING: Buy to let investors leave UK property market
FURTHER READING: New homes planned in UK highest since 2007