Foxtons sees another fall in house sales while tenant fees ban eats into rental revenues

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Estate agent Foxtons blames Brexit for lower house sales last year as the tenant fees ban eats into income sending profits down a third

  • Foxtons’ revenues from house sales fell 10% to £32m; lettings down 2% to £65m
  • Adjusted core profit for 2019 fell 32 per cent to £2.5million 
  • ‘Early signs’ of improvement so far, but company prepared for more challenges 
  • Rightmove saw another year of growth and said 2020 has started on a good foot

By Camilla Canocchi for Thisismoney.co.uk

Published: | Updated:

London-focused estate agent Foxtons said 2019 was ‘another challenging year’ as Brexit uncertainty hit its revenues from house sales and the tenant fees ban ate into its rental income.

The company, famous for the Mini Coopers that its sales teams drive around London, said it saw ‘early signs’ of an improvement so far this year, with a stronger sales pipeline than last year.

However, it still expects affordability and stamp duty to hold back sales and said it is prepared for further challenges during the Brexit transition period.  

Foxtons said sales transactions continued to fall from the historic lows seen in 2018

Foxtons, which closed down four branches at the end of last year, has been hit by a property slowdown in London, its main market, as many buyers and sellers chose to stay put amid Brexit uncertainty. 

The company saw total revenues fall 4 per cent to £106.9million last year, while adjusted core profit for 2019 fell 32 per cent to £2.5million.

Revenues from its lettings division, which makes up about 60 per cent of the total, fell 2 per cent to £65.7million, with £2.7million shaved off due to the tenant fees ban which was introduced in June last year. 

Revenues from house sales fell by a bigger 10 per cent to £32.6million, as the company blamed the impact of continued political uncertainty on transaction volumes and prices. It also saw fewer sales of expensive homes, it said.

‘In 2019 sales transactions continued to fall from the historic lows we saw the previous year,’ chief executive Nic Budden said.

‘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.’

Revenues from its mortgage arm rose 3 per cent to £8.5million.

Pre-tax loss for the year narrowed to £8.8million from £17.2million in the previous year, after it reduced its operating costs.   

Shares in the company slipped 4 per cent to 75.20p in afternoon trading on Friday.  

Rightmove sales and profits rise but membership numbers fall

Property website Rightmove saw another year of growth and said 2020 had also started on a good foot, but saw a decline in members 

It saw revenues rising 8 per cent to £289.3million last year, with operating profit rising also 8 per cent to £213.7million. 

However, it recorded a drop in the number of estate agents signing up to their site. Membership numbers fell 3 per cent to 19,809, from 20,454 in 2018. 

The website said January 2020 was their busiest month ever with more than 152million visits, with the trend continuing this month as they recorded their five busiest days ever in February.  

Rightmove shares fell 4 per cent to 610.22p in afternoon trading on Friday.    

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