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LSL warns of 'challenging market conditions'

LSL has warned of a slowdown in sales and a rise in fall-throughs at the agency as it issued a “cautious market outlook’ for 2023.

A trading update from the listed agency brand this morning highlighted that there are a wider range of potential outcomes for the full year than previously expected due to recent political and economic changes and challenges.

The update for the 10-month period to 31 October 2022 said there has been a marked slowdown since the September mini-Budget in the market of purchase related front end sales activity, impacting new sales agreed in estate egency, mortgage applications in financial services and valuation instructions in surveying.


Residential sales fall-throughs have trended higher in the past few weeks, mainly from more recently agreed sales, LSL said.

However, it added that residential exchanges in the second half of the year remain in line with expectations.

The group said most of its profits are set to be generated by its financial services and surveying businesses.

It is predicting that the total mortgage lending market will reduce in 2023, although LSL said the market impact of a smaller purchase market is expected to be considerably offset by higher levels of refinancing activity.

The update said: “The housing market is heavily impacted by sentiment and has the potential to surprise on the upside. However, with the recent reduction in activity levels and continuing uncertainty over UK economic conditions, until we have greater clarity on the economic backdrop, we are cautious on the market outlook for 2023. 

“A significant reduction in housing transactions would clearly have a material effect on our estate agency residential sales business and our direct-to consumer financial services business.

“We continue to focus on proactive management of our cost base, to limit the impact of these pressures.”

David Stewart, chief executive of LSL, said market conditions have changed since the brand’s interim results.

He said:  "Since that time, market conditions have been more challenging than previously expected, with the mortgage and housing markets being disrupted by political uncertainty and sharply increasing interest rates. 

“Across the market, this has given rise to a reduction in mortgage activity and new house sales, and an increase in fall-throughs of previously agreed sales.

"This challenging background means that there is a wider range of potential outcomes for the full year than previously expected.”

He said he is confident that underlying group profits will “at least be broadly in line with the second half of 2021, with the possibility of a stronger performance depending on the volume of valuation instructions received from lenders”

The update also shows that LSL made additional costs incurred due to discretionary payments to more than 2,000 colleagues to help alleviate the impact of significant increases in living costs.  

It said around £0.6m of these costs will be reflected in 2022, with a further £0.8m to be paid in 2023 to cover the winter months.


  • Group revenues for the ten months ended 31 October 2022 were £276.1m (2021: £275.4m).
  • Financial Services Network revenue increased 9% in smaller mortgage and protection markets.
  • LSL's share of the total UK purchase and re‐mortgage market increased to 10.2%1 (10 months to 31 October 2021: 9.0%) reflecting LSL advisers' strong position in the re-mortgage market, which is expected to support market share during 2023.
  • Record Surveying revenue, up 9% in flat mortgage and re-mortgage approvals market.
  • Surveying income per job for the ten month period was £175 (2021: £173).
  • Estate Agency revenue was down 6% and Financial Services Other revenue down 2%, both of which were impacted by materially smaller purchase and new build markets.
  • In Estate Agency, we maintained our market share of instructions across the locations we trade and slightly improved our share of housing transactions on a national level.
  • Lettings income is less affected by housing market cycles and increased by 2% in a market with a shortage of new instructions.
  • The Group retains a very strong balance sheet, with net cash at 31 October 2022 of £29.1m (31 October 2021: £39.7m). Net cash at the end of the period is after investment made into Pivotal, and shares purchased in the Share Buy Back programme. We expect positive cash inflows in the remaining weeks of the year.
  • Proper Estate Agent

    You'd never of guessed a market slowdown and more fall-throughs - amazing.

  • Matthew Payne

    They have more to worry about than the market, it wasnt more than a few years ago they were making 3 x the profit on EA that they do now. How expectations change.


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