Estate agents’ share prices have taken a knock after poor figures reported to the City by Countrywide suggested a wider malaise in the sales market.
At close of play yesterday Savills’ share price was down 1.81 per cent and Foxtons down by 6.45 per cent while Countrywide itself was off a whopping 11.18 per cent.
Earlier in the day Countrywide - Britain’s largest sales and lettings agency group - revealed operating profits in the first nine months of the year were down 11 per cent compared to the same period of 2014.
The company also admitted that full-year profits were likely to fall short of its 2014 total of £121.1m and that sales volumes for the full 2015 year would be at least five per cent below last year’s total at around 950,000.
Next year will see only "modest" transaction growth, investors have been told.
In line with many other industry players, Countrywide says the stamp duty reform introduced late last year has not generated significant numbers of transactions in the volume market, and has constrained moves at the upper end of the market. There has also been no significant post-election bounce.
"The economic backdrop in the UK coupled with improving consumer confidence point to modest transaction growth in 2016. With a strong residential lettings sector now forming a permanent part of the housing market, and with more customers than ever choosing to arrange mortgages through intermediaries, the outlook for 2016 is a positive one for Countrywide” insists group chief executive Alison Platt.
"Our intent is to increase our resilience to the sales cycle volatility and broaden the group's business to deliver a strong future and sustainable long-term value for our shareholders. Whilst there is much to do to drive that both organically and through acquisition, I am confident that the start we have made will yield positive results in the near future."
Estate Agent Today and Letting Agent Today have recently revealed some of the key sales and lettings sector changes being proposed by Countrywide, which has seen large-scale management and board-level upheaval in recent months.
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This says it all (yesterday's Telegraph article)
'Gavin Jago, of Peel Hunt, said: “Countrywide has been trying to hold its commission rates and its market share has suffered as a result.
The growing presence of online and hybrid estate agents will only increase this pressure.” Mr Jago thinks the sector is only at “the early stages of structural change”, which could see consumers shift their business to lower-cost online estate agents'.
See http://www.telegraph.co.uk/finance/markets/marketreport/11975980/Countrywide-warns-on-profits-as-housing-sales-slow.html?utm_source=dlvr.it&utm_medium=twitter
Well that's great for Mr Jago - how insightful.
Or perhaps Countrywide is a barometer for the market. Actually Russel, I predict Countrywide will have an online only offer within the year but that most successful agents will be hybrid within three, we shall see
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