London-focussed estate agent Foxtons on Wednesday said it expected an 80 per cent drop in 2018 adjusted core earnings, hit by a fall in sales volumes and rise in operating expenses, adding that 2019 will be “challenging”.
Foxtons, known for its chain of coffee shop-style offices, said transactions in 2018 fell from last year’s historically low levels in London, making it one of the “toughest sales markets” ever.
The chain's announcement came as UK house price growth slowed sharply with values barely rising, according to Nationwide Building Society.
Its index showed annual price growth cooled to just 0.1 per cent in January, down from 0.5 per cent in December and 3.2 per cent a year ago. On the month, property prices increased 0.3 per cent when seasonally adjusted to an average £211,966 (€242,583).
Demand for London property has been sluggish in many areas due to a rise in stamp duty property tax and after Britain voted to leave the European Union.
Recent indicators point to a slowdown across the UK economy and increasing caution among households.
Shoppers’ pessimism about the outlook is at its highest in seven years, and the Bank of England said this week that consumer credit is growing at its slowest annual pace in four years.
"Looking ahead, we expect trading conditions in the sales market to remain challenging throughout 2019," Foxtons chief executive Nic Budden said.
Foxtons, which had been a symbol of the British capital’s property boom, closed six of its branches last year, leaving it with 61 offices that cover more than 85 per cent of the city.
The company said it expects full-year revenue for the year ended December 31st to fall 6 per cent to £111 million. – Reuters/Bloomberg
