The business editor of right wing political weekly The Spectator says “what’s bad for Foxtons is on the whole likely to be good for working Londoners.”
The comment, by the magazine’s Martin Vander Weyer, follows the London-focussed agency’s interim figures this week, which saw it go into the red for the first time in a decade with a £2.8m loss.
Foxtons pinned responsibility on London’s housing market which was “undergoing a sustained period of very low activity levels” according to the agency’s chief executive Nic Budden.
But The Spectator is more cynical, saying that when Foxtons was floated in 2013 - “at an absurd valuation of £650m” - this was merely an indicator “overheating house prices at the time.”
Vander Weyer says that even further back its £360m sale to private equity investors in 2007 by founder Jon Hunt was also overpriced.
“Today its market capitalisation is just £140m, the shares having been on a downward slide since stamp duty rises began to bite in 2015” says The Spectator’s man, saying that while Brexit uncertainty has played a part, “the price of an average home in the capital has at last begun to drift downwards (as opposed to merely rising more slowly) ... and is expected by many pundits to continue falling until 2020.”
Vander Weyer says this is a correction, not a crash, and that the upside is that first time buyers have at least a chance of getting on the housing ladder.
He concludes: “Not that I’m prejudiced against slick estate agents, you understand, but what’s bad for Foxtons is on the whole likely to be good for working Londoners.”