Foxtons profits crash 54% as sales slump on ‘unprecedented’ year
Foxtons saw pre-tax profits plummet by 54% to £18.8m last year following what it called “an unprecedented sequence of events”.
The London-based estate agent said Stamp Duty changes and the EU referendum vote led to a substantial reduction in property sales, especially in Central London.
Foxtons also warned that the market remained tough, especially in central London and added that 2017 sales volumes could be lower than last year if there was no improvement.
However it noted that mortgage broking revenue did rise 7% to £8.9m driven by higher volumes in the first half of 2016 ahead of Stamp Duty changes and that earnings from lettings had stayed steady over the year.
Overall revenues fell 11% from £149.8m to £132.7m in the year ending December 2016.
CEO Nic Budden 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.
“We were not immune to the decline in volumes, although our lettings business proved more resilient, whilst our mortgage broking business also performed well. We expect trading conditions to remain challenging throughout 2017.
“Should current sales activity continue through the remainder of this year, it is likely that 2017 sales volumes will be below last year,” he added.
Budden added that the firm had a clear strategy to navigate the “challenging market conditions”.