LSL Property Services has issued a warning that market conditions are softer than expected so far in 2018 and that transaction volumes are likely to drop compared to last year.
In a statement to shareholders, to coincide with the company’s annual general meeting today, LSL says that market conditions so far in 2018 have been softer than expected - and less strong than in the same period of 2017.
“LSL expects to see a reduction in the volume of house purchase transactions compared to the prior year, with the rate of house price Inflation inside and outside London continuing to soften” it warns.
Nonetheless, the firm says that it should deliver its own 2018 results in line with expectations, assisted by acquisitions and good performance expected from lettings and financial services income streams.
“Mortgage costs continue to be low by historic standards and mortgage availability remains good. The medium to longer term fundamentals of the UK housing market remain solid” it insists.
In terms of the past year, it says total estate agency revenue increased 2.4 per cent year on year, although exchange income decreased 15.3 per cent “reflecting the softer market conditions, the closure of eight owned branches in Q4 2017, the timing of national bank holidays in Q1 2018 compared to Q1 2017 and the weather conditions in March 2018.”
LSL Property Services also reports that lettings delivered 4.2 per cent growth over the year to the end of March, with financial services especially strong with 20.1 per cent growth.
Marsh & Parsons - LSL’s premium London agency - saw revenue decrease 1.4 per cent year on year reflecting reduced exchange volumes, although lettings income for the brand rose 5.9 per cent.
Marsh & Parsons has gone ahead with this month’s opening of a new branch in Chiswick.
Trading in LSL’s surveying division for the first two months of 2018 was broadly flat against 2017 “which was a robust performance against the softer market” the company says.