Foxtons’ profits nosedive as London sales reach ‘near historic lows’

Foxtons has seen profits plunge as sales of homes in London reached “near historic lows”, the estate agency giant has announced.

The firm said its full-year pre-tax profit tumbled 65 per cent from £18.8 million to £6.5 million in 2017, while revenue slumped 11 per cent to £117.6 million.

Foxtons’ CEO Nic Budden said: “We are pleased to have delivered a performance in line with market expectations.

“However, sales activity in the London property market is near historic lows and this had a significant impact on our overall performance in 2017.”

The group’s sales division saw revenue drop 23 per cent to £42.6 million, which it said was a result of “continued market weakness causing lower transaction volumes”.

The results come amid a sharp slowdown in London house prices. Figures from Acadata earlier this month revealed the capital suffered a sharp 4.3 per cent fall in house prices in the fourth quarter of 2017, its worst performance since the aftermath of the financial crisis in 2009.

London house prices continue to fall as buyers hit affordability limit

Mr Budden added: “Looking ahead, we expect trading conditions to remain challenging during 2018, and our current sales pipeline is below where it was this time last year.”

Revenue from lettings was down three per cent at £66.3 million due to downward pressures on market rents, Foxtons said.

But the London and Surrey-focused company said it will focus on growing its lettings arm, which is described as “less cyclical” than sales.

Efforts to tackle its costs base also saw the firm book a £2.3 million non-recurring charge.

Mr Budden said: “The cost actions we have taken and our net cash position mean we are well placed to withstand these conditions and make the investment we have identified.

“We are confident that our high-touch approach to customer service and knowledgeable people delivers tangible results for customers differentiating us from the competition.

“The London property market has attractive long-term characteristics and our brand strength, coverage and approach, position us well to manage through the current market uncertainties and take advantage of any future market recovery.”

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