London’s stumbling property market sent profits crashing at two of the Capital’s top estate agent chains.
Foxton Group PLC (LON:FOXT) reported property sales tumbled by a third in the half year to June, with lettings revenue also lower as rental prices fell.
READ: Estate agent Foxtons sees first-quarter revenue drop by 25% as sales commissions almost halve
Nic Budden, chief executive, said the Capital’s property market was still being affected by the 2016 hike in stamp duty on buy-to-let and second homes.
“Whilst sales commissions in the second quarter as a whole were down 3% versus prior year, sales exchanges and our under offer pipeline weakened through June and the early part of July.”
Sales overall were 15% lower at £58.5mln while profits dropped to £3.8mln from £10.5mln.
Budden said it was resilient performance in the context of a London property market that had been undermined further by unprecedented economic and political uncertainty.
hit even harder
PLC fared even worse, with profits all but wiped out by a drop of almost a quarter (to 4,351) in the number of exchanges it completed in London.
Profits in the half year to June tumbled to £447,000 from £24.3mln on sales down to £333mln from £370mln.
Alison Platt, Countrywide’s chief executive, also blamed political uncertainty for the torpor in London.
“We are also seeing increased differences between vendors and buyers on price expectations while both groups wait to see how the political situation unfolds.
“We estimate that the supply of properties listed in London has fallen around 13% in the first half of 2017 compared to 2016.”
Platt said the estate agent would undertake another round of cost cuts to tackle the lack of sales. The group has already reduced costs by £27mln compared to this time a year ago.
Shares fell 9% to 149p.