Much confusion and uncertainty are circulating in the air in connection with the London property market as British estate agencies are contemplating on what to do next.
Profits at Foxtons have dropped by 42% in the first six months of the year. This has been caused by the EU referendum that consequently led to a decrease in property sales, with the estate agent warning that the downturn in London’s housing market would continue at least until the end of 2016.
Foxtons’ pre-tax profit dropped to £10.5m over the period, from £18.1m a year earlier. Property sales volumes were down by 10.2%, pushing revenues 7% lower to £31.3m. Lettings revenues also suffered in the run-up to the referendum on 23 June, declining by 2.7% to £32.6m. Foxtons scrapped a special dividend as it said the Brexit vote had caused a prolonged period of further uncertainty.
Foxtons chief executive, Nic Budden, said to market analysts and investors: “Certainly, interesting times in the first half…As the EU referendum debate continued, uncertainty and confusion among customers and clients did lead to significantly weaker market conditions.
“We are anticipating relatively weak market volumes through to the end of the year. We’ll probably just take our foot off the pedal a little bit in 2017, naturally taking a more cautious approach to investment while the market settles down.”
“We’ll probably just take our foot off the pedal a little bit in 2017, naturally taking a more cautious approach to investment while the market settles down.”
The London property market is definitely facing a whirlwind, which will affect investors and first-time buyers alike. Budden said that Foxtons would scale back its aggressive expansion plans next year, after opening seven new branches this year. “It won’t be seven next year and it won’t be zero,” he said. Since floating on the London stock market in 2013, the company has opened between five and seven branches a year.
“It won’t be seven next year and it won’t be zero,” he said. Since balancing on the London stock market in 2013, the company has opened between five and seven branches a year.
He says: “It won’t be seven next year and it won’t be zero,” he said. Since floating on the London stock market in 2013, the company has opened between five and seven branches a year.
According to Nationwide, Britain’s biggest building society, house prices have so far resisted the darkness brought on by the Brexit vote, rising by 0.5% in July.
A market analyst at ETX Capital said: “But prices are very different to activity in the housing market – strong demand and few sellers coming to the market could squeeze prices higher even if activity collapses.”
The London property market is very unpredictable during this present time, so all that can be done as an investor or property buyer is sit back, relax and have patience that faith will be restored.
