Foxtons is warning that 2020 will be yet another difficult year for the agency despite the so-called Boris Bounce helping the sales market in its core area of London.
In a statement to shareholders this morning, chief executive Nic Budden says: “We expect structural issues such as affordability and stamp duty to hold back sales volumes and there is room for significant improvement in consumer confidence. Our sales pipeline is stronger than the same time last year which is positive but our focus remains on lettings and cost control in line with our prudent approach to running the business.”
The figures reported this morning for 2019 confirmed earlier releases suggesting a big sales slump and a mixed performance on the lettings side.
Group revenue was four per cent down on 2018 with sales revenue down 10 per cent and lettings income dipping two per cent.
“Transaction volumes and prices were impacted by ongoing political uncertainty, particularly towards the top end of the market” it says.
Mortgage revenue grew three per cent.
There will be no final dividend for shareholders.
Budden adds: ”In 2019 sales transactions continued to fall from the historic lows we saw the previous year. In addition, we saw fewer high value sales at the top end of the market, which impacted sales revenue.
“In lettings, where our focus remains, we delivered another solid performance, despite the impact of the tenant fee ban which came into place in June 2019. The decision not to offset this through increased landlord fees, like some of our competitors, has further improved the attractiveness of our excellent offer and our market share. We continue to build our proposition for the growing institutional PRS segment.
“Selling or finding a property is more challenging than ever before, whilst landlords are facing increasing legal risks through tighter regulation. These factors create even more relevance and demand for our high service models across both sales and lettings, which are built on the expertise and commitment of our people.
“Overall, we are pleased with our resilience in this prolonged downturn. The business and our people have proved adaptable and resilient, delivering stable results. We continue to maintain a strong balance sheet with no external borrowings.
“Looking forward, with the uncertainty of the general election removed, early signs are that the sales market may improve during 2020. Our sales pipeline is currently ahead of last year, however we are well prepared for further challenging conditions in the sales market in the run up to Brexit and will continue to build our lettings business and manage our cost base in line with trading conditions. In the medium-term, we maintain confidence in the inherent attractiveness of the London market and our ability as London's most recognised estate agent to capitalise on future growth opportunities."