- Revenue from sales dropped 17% to £9.9m in the third quarter
- Volume of sales in the market also decreased by 23% in the third quarter
London’s leading real estate agency Foxtons has witnessed a decline in home sales as elevated mortgage rates continue to burden the property market.Thank you for reading this post, don't forget to subscribe!
Revenue from sales fell 17 per cent to £9.9 million in the third quarter and market volume dropped 23 per cent.
However, revenue remained relatively stable at £43.9 million in the three months to September 30 compared with the previous year, while sales increased 5 per cent to £114.8 million in the first nine months of 2023.
The group disclosed that revenue increased by 5 per cent to £114.8 million in the nine months to September 30, despite a 23 per cent decrease in sales market volumes.
Despite the decrease in house sales, Foxton stated that it continued to perform according to its operational transformation plan and surpassed the market.
Guy Gittins, the CEO of Foxtons, mentioned that the group’s gains in market share in lettings, sales, and financial services had facilitated achieving year-on-year revenues, despite a reduction in sales market transaction volumes, due to the high interest rate environment. Made capable of increasing. ,
House prices in the UK have stagnated as demand has been impacted by limited availability and affordability of mortgages.
According to mortgage lender Halifax, the typical London home has declined by £26,514, or 4.8 per cent, in the last 12 months.
However, Gittins stated: ‘We have outperformed the market for the third consecutive quarter with operational upgrades taking effect.
‘Our investments in fee earners, training, data, and brand are yielding quicker results than I anticipated and are now delivering significant advantages to our competitiveness and market position.’
Foxtons also projects a smaller net cash position as of December 31, ‘assuming there are no further acquisitions before the end of the year.’
Foxton shares declined by 3.16 per cent to 36.80p during afternoon trading on Thursday.
Analysts at Peel Hunt, who maintain a ‘hold’ rating with a target price of 40p, stated: ‘The group continues to execute on its strategy, but sustained profit growth will likely depend on an improvement in the sales market, which could be quite far off at this point.’
In July, rising rents offset a decline in home sales at Foxton. The real estate agency reported profits of £6.1 million in the first six months of the year, a 41 per cent increase compared to the same period in 2022.
The group mentioned that it is experiencing a higher demand for rental housing compared to the supply among tenants, leading to rent increases.
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