Foxtons has been the stock market whipping-boy for a flailing central London housing market, losing up to 20 per cent of its share value at the worst of trading yesterday as new figures consolidated the gloom in prime areas of the capital.
The agency, which has over 50 branches across the capital so is unusually vulnerable to concern about London housing issues, has issued a profits warning saying it has endured a "sharp and recent" slowdown in sales.
It said that while it had performed exceptionally well in the nine-months to June, the market had cooled dramatically more recently with quarterly sales commissions down 7.8 per cent on the same period last year as reduced sale volumes offset price increases.
Foxtons' chief executive Nic Budden insisted: Despite the impact that market uncertainty is having on transaction volumes, we are continuing with our clear strategy, centralised business model and steady roll-out programme which is delivering higher market share.
This comes only 48 hours after a stark briefing from high-end agency Strutt & Parker after figures showed that its Q3 figures for 2014 in prime central London revealed a 20.8 per cent decrease in the number of homes sold below £2m, compared to the same quarter last year.
Even worse were its figures for homes in the £2m to £5m range - down 27.1 per cent.
The agency has sugared the pill by saying that when looked at over the longer-term these figures are not as drastic as they appear - the volume of transactions is actually up by 3.1 per cent compared to Strutts' rolling five year quarterly average.
Meanwhile data for the rest of the UK showed that mortgage activity dropped in September compared with a year ago - another sign of a cooling market.
The number of mortgages approved for house purchases was down 10 per cent compared with a year ago according to the British Bankers' Association. Approvals had been relatively high at the start of the year but have slowed since June.
There were 39,271 approvals for house purchases in September, the BBA says.
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Comments
Foxtons also comented that they had also identified "mismatches between the price expectations of buyers and sellers". I'm sure fellow agents that have worked in ares where Foxtons are present will find that statement rather amusing.
It might be because the prices shot up to absurd levels, if they were a gradual rise then the number of sales might be a little more sustainable.