Foxtons sees property sales plunge as Brexit vote hits

March 8, 2017 8:06 am Published by

Foxtons sees property sales plunge as Brexit vote hits

  • 8 March 2017
  • From the section Business

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Foxtons says revenue from property sales plunged 23% last year due to uncertainty following the Brexit vote as well as changes to stamp duty.

Profits at the London-focused estate agent more than halved as a result, falling to £18.8m last year from £41m in 2015.

Foxtons does not expect any let-up in 2017, warning trading conditions will “remain challenging”.

Sales will fall further this year if current trends continued, it said.

“Last year’s London property market was severely impacted by an unprecedented sequence of events with changes to stamp duty and the EU referendum vote leading to a substantial reduction in property sales transactions, especially in central London,” said chief executive Nic Budden.

Despite the drop in property sales, revenue from lettings was more resilient, slipping just 1%, while its mortgage broking business performed well. As a result, the fall in overall group revenue was less severe, dropping 11.4% to £132.7m.

Price rises slow

Mr Budden said the group had a clear strategy to tackle the challenging market conditions, saying he was confident the group would deliver “long term growth”, and said he expected London to remain “a highly attractive property market for sales and lettings”.

London property prices have risen sharply in recent years owing, in part, to its attraction to overseas investors. However, price increases slowed last year, partly due to a new stamp duty surcharge facing overseas investors.

During 2016, the average price of Foxtons’ property sales was £568,000, up from £550,000 in 2015.

The group had already warned that the result of the EU referendum, in which the UK voted to leave Europe, would affect London’s housing market.

Earlier this month, building society Nationwide said UK house prices had accelerated in February with property values rising by 4.5% in a year.

However, it said the outlook for the market was uncertain, predicting a 2% rise in UK house prices over the course of the year.

Foxtons currently has 67 branches across London and the home counties.

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This post was written by FSB News