A trading update released by Countrywide this morning shows a 29 per cent slump in London exchanges in the third quarter of the year compared to the same period of 2015, with a one per cent dip in exchanges across the rest of the country.
The update also warns that worse is to come in 2017.
“The slowdown in activity across the market in Q3 is clearly evident in the closing pipe-lines for our [out of London] Retail and London businesses, which at the end of September were down 16 per cent and 26 per cent respectively compared to a year earlier” says the update.
Its revenue fell in the third quarter to £188.5m, down from £197.1m for the same period last year but revenue for the first nine months of the year totalled £558.7m, up from £535.7m for the same period in 2015.
Across the broader Countrywide business, the update reveals that the ‘digital pilot’ - the option for vendors to use a hybrid online service instead or, or leading up to, a ‘traditional’ full agency service - has delivered ‘consistent out-performance’.
The pilot has seen an increase in leads of four per cent, a 15 per cent rise in instructions, an eight per cent rise in registered buyers and - perhaps surprisingly - no change in the fee received per instruction, on average.
The statement to shareholders says: “What we have learned over the past few months has informed the development of the proposition going forward. The combination of our people, our high street presence and online technology is clearly differentiating. It is evident that our full service customers value the enhanced online tools that this proposition brings. We are now rolling out our digital proposition to the next wave of brands and branches as planned.”
The lettings business has grown significantly - the number of properties under management has risen over the past 12 months to 90,614 from 82,013, a rise of 11 per cent.
The firm says its new Fixflo problem-reporting app, launched in August, has been a success for both tenants and landlords.
In a critical warning for the near-term, it says: “We now expect transaction volumes for 2016 to be six per cent down on 2015 and while too early to say definitively, it is likely that the level of market transactions in 2017 will be lower than 2016.”
It also warns that rental stock has increased more than tenant numbers, meaning rents have fallen in some areas.
Chief executive Alison Platt concludes the update by saying: “We have made good progress this year despite tough market conditions since the EU referendum, particularly pleasing is our growth in market share in both sales and lettings based on available market data up to July.
“In addition, these results in our Lettings, Mortgage and Professional Service businesses underline the importance of the breadth of the group and the focus we have placed on keeping the customers we win and continuing to serve them.
“In light of the chancellor’s announcement yesterday regarding letting agents’ fees, we look forward to working with the Government through this consultation process.
“The results of our digital sales pilot and the roll out of Fixflo in Lettings signal strong steps towards building our multi-channel network across the UK. Our work to ensure we have fewer, better brands and branches continues at pace.”