LONDON (Reuters) - London-focussed estate agents Foxtons posted a worse-than-expected 65 percent fall in 2017 profit on Wednesday which it blamed on the capital’s once booming property market slumping to “historic lows.”
The brand, famed for its chain of coffee shop-style outlets, reported pre-tax profits of 6.5 million pounds last year, lower than the 9 million pounds anticipated in a Thomson Reuters poll of analysts.
Whilst sales revenues dropped 23 percent, turnover at its lettings business fell only 3 percent during the period and Foxtons said its priority was to grow that part of the business, which is less cyclical.
However the government is planning to ban fees charged to tenants as part of efforts to make the housing market fairer particular for younger people, in a move which will likely hit the business model of Foxtons and some of its peers.
“Though at this stage it is unclear exactly what the legislation will look like, we are exploring ways to mitigate the impact,” said Chief Executive Nic Budden.
The company, which had been a symbol of the British capital’s property boom, saw profits more than halve in 2016 as well and had said in as early as 2014 that the real estate market was cooling, warning on profits.
It said it expected trading conditions this year to remain challenging and that its current anticipated sales are lower than the same time last year.
Reporting by Costas Pitas; Editing by Elisabeth O'Leary and Kate Holton