After reporting a 65% profit loss earlier this year, major London estate agent Foxtons has posted some even more downbeat performance figures this week.
It’s nothing new that London’s property market has spent the past several months losing pace while other parts of the country have thrived, and it seems that London-focused estate agent chain Foxtons is one of the worst hit by the slowdown.
Foxtons’ most recent sales report, released this week, reveals that it sustained losses of £2.5m for the first six months of this year, with group revenues falling by 9% to £53m and revenue from its sales side dropping by almost a quarter (23%) to £17.2m.
While house prices in the capital have been hitting the headlines recently for falling behind the growth seen in other regions of the UK – and behind previous performance – it is the lack of transactions rather than falling property values which is causing issues for the estate agent, after a “sustained period of very low activity” in London’s housing market.
Lettings stronger than sales
With the average home in the capital now selling for around £478,853, according to HM Land Registry figures, even with stagnating property prices it is an unaffordable place for many to buy, and the stamp duty bill for such high-value transactions could also be a factor deterring people from buying and selling.
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Nic Budden, chief executive of Foxtons, said: “The property sales market in London is undergoing a sustained period of very low activity levels with longer and less visible transaction outcomes, which clearly impacts our business. We continue, however, to achieve market leading share of listings giving us confidence that our service led, results based model remains highly relevant to consumers. Going forward we will continue to invest in our proposition to enable us to maintain our differentiation in the minds of buyers, sellers, landlords and tenants.”
On the lettings side, revenues slid by just 1% during the first six months of 2018 to £31.7m for Foxtons, with renting still one of the most popular tenure types in the capital as homeownership slides.
Back in March, the estate agent predicted a subdued year ahead for its property sales side in London after revealing that its profits had slumped by around two thirds – 65% – in the year to December 2017, with political uncertainty as well as stamp duty costs cited as potential causes for the slide.