Upbeat results from agency group despite forecast of transactions slump

The LSL Property Services group - which is increasingly focussing activities in the mortgage and personal finance world - has issued an upbeat set of trading figures for the past calendar year.

However, it warns of a 19 per cent slump in housing transactions expected to take place in 2022 compared with 2021.

Overall LSL’s underlying operating profit increased 40 per cent in 2021, and pre-tax profits rose a juicy 234 per cent - LSL’s share of the national mortgage market rose 10 per cent. 

The estate agency division’s underlying operating profit soared 53 per cent to £18.4m “reflecting increasing residential market share across its core catchment areas and overall growth in the value of housing transactions” according to a statement to shareholders this morning.

However, the statement says the coming year may be less buoyant, stating: “We expect 2022 financial performance to benefit from continued growth in financial services in a more challenging housing market, demonstrating reduced cyclicality of earnings.”

It continues: “Latest market estimates suggest the mortgage market will be around 11 per cent lower than 2021, and housing transactions in 2022 around 19 per cent lower than 2021.”

And it says that the company’s increasing focus on financial services and surveying and valuation “has reduced LSL's exposure to housing market volatility with the result that we expect a more limited impact on the Group's results in 2022 than would historically have been the case.”

LSL adds that its financial services division will be its most profitable area of activity by the end of next year with further organic growth in its network of financial advisers expected, supported by additional advisers from its subsidiary company, Pivotal Growth.

David Stewart, group chief executive, tells shareholders: "I am pleased to report that LSL's core businesses are performing well and that our Financial Services led growth strategy has made good progress.

"We expect mortgage and housing transactions to revert to pre-Covid levels with geopolitical uncertainties adding to existing inflationary pressures. These will affect our estate division in particular, and as always, we will be agile and respond to market conditions as required.

"However, the benefits of both our growth strategy in Financial Services and the significant progress made in Surveying & Valuation, mean that we expect the housing market cycle to have a more limited impact on the group's results.”