London-focused estate agent Foxtons said sales could continue to fall this year after a slump in demand pushed down 2016 core earnings by nearly 50 per cent, due to a property tax hike and the impact of Britain's vote to leave the European Union.
Foxtons, once a symbol of London’s surging property market, floated in 2013 ahead of the peak of the boom, and has since failed more than once to meet market expectations, including as early as 2014.
The firm, known for its chain of coffee shop-style outlets and fleet of Mini cars, said earnings before interest, tax, deprecations and amortisation (ebitda) fell by 46 per cent to £25 million pounds ($30 million) last year, lower than the £28 million forecast by a Thomson Reuters poll of analysts.
Central London property prices have fallen sharply in recent months, according to a series of surveys, after a tax hike introduced in April hit demand for top-end homes, compounded by uncertainty, particularly for foreign investors, of the Brexit vote.
"[There was a] significant fall in sales volumes immediately following the first quarter of 2016," said chief executive Nic Budden.
“Should current levels of sales activity continue in the short term, it is likely that 2017 volumes will be below those in 2016,” he said.
Britain's third-largest house builder Taylor Wimpey also said on Wednesday that lower selling prices in central London had affected its performance, with the value of its full-year order book falling marginally.
While overall revenue fell at Foxtons, fourth-quarter lettings revenue was flat at £13 million, a strong area for the firm which could be hit by the introduction of a ban on lettings fees announced by the government in November.
– (Reuters)
