London Property Slowdown Effects Estate Agents Profits
London’s property slowdown is having a detrimental effect on London estate agent Foxtons. Their revenue from selling houses has almost halved in the final quarter of 2016. Foxtons has announced that in the final quarter of last year they achieved a revenue of only £26m. This figure is down a quarter in the same period of 2015.
For the whole of 2016 Foxtons revenues were recorded to be £133m. This is an 11% drop from their achieved revenue in the year before.
But it’s not just the property slowdown in London that has caused this fall in revenue, all UK estate agents are feeling the strain following uncertainty caused by the EU referendum and higher stamp duty rates.
The chief executive, Nic Budden, says this may just be the start of a difficult year. Here is his statement to shareholders:
“Despite a challenging year across the residential property markets, we have continued to make good progress in respect of our strategic initiatives, including building our presence in the private rental sector and new homes, and leveraging our technology using data analytics and digital marketing to enhance our customer proposition.
“We also opened seven new branches in 2016 and a further two branches in outer London are due to open in Q1 2017.
“Looking ahead, we expect trading conditions to remain challenging in 2017. Should current levels of sales activity continue in the short term, it is likely that 2017 volumes will be below those in 2016. Our balanced business model provides resilience against sales market cycles and we have a strong balance sheet with no debt.
“Our high-touch approach to customer service continues to be a key differentiator and as the most recognised residential brand in London, we are uniquely positioned to manage through the market uncertainties and take advantage of any change in conditions.”
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