Top London estate agency Foxtons has seen house sales slump, as higher mortgage rates continue to hit the property market.
Sales revenue in third quarter was down by 17 per cent to £9.9million with market volumes falling by 23 per cent.
But revenues were broadly flat at £43.9million in the three months to 30 September against a robust prior year comparative, while sales are up 5 per cento £114.8million for the first nine months of 2023.
The group revealed that revenue was up 5 per cent to £114.8million for the nine months to 30 September, despite sales market volumes being down 23 per cent
Despite house sales falling, Foxtons said that it continued to deliver against its operational turnaround plan and outperform the market.
Guy Gittins, chief executive officer of Foxtons, said market share gains across the group’s lettings, sales and financial services have enabled it to grow revenue year-to-date ‘despite reduced sales market transaction volumes, a result of the higher interest rate environment’.
UK house prices have stagnated as demand is hammered by weaker mortgage availability and affordability.
The typical London home has fallen £26,514 or 4.8 per cent over the past 12 months, according to the mortgage lender, Halifax.
But, Gittins added: ‘We have delivered a third consecutive quarter of market outperformance as operational upgrades take effect.
‘Our investment in fee earners, training, data and brand is yielding results sooner than I expected, and is now delivering material benefits to our competitiveness and market positioning.’
Foxtons also forecast a small net cash position on 31 December, ‘assuming no further acquisitions ahead of the year end’.
Foxtons shares were down by 3.16 per cent to 36.80p in afternoon trading on Thursday.
Analysts at Peel Hunt, which maintained a ‘hold’ rating with a target price of 40p, said: ‘The group continues to execute its strategy, but a sustained uplift in profits will likely depend on a recovery in the Sales market, which appears some way off at this point.’
In July, soaring rents offset a slump in house sales at Foxtons. The estate agency posted profits of £6.1million for the first six months of the year, up 41 per cent on the same period of 2022.
The group said it was seeing demand among tenants looking for houses to rent outstrip supply, pushing up those rents.
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