Foxtons warns London housing market in ‘prolonged downturn’

London-focused estate agent Foxtons has swung to a loss and says the housing market in the capital is in a “prolonged downturn”.

The company reported a loss of £17.2m for last year, partly due to the costs of closing six offices. It made a profit of £6.5m in 2017.

Foxtons added that Brexit uncertainty was “impacting consumer confidence”.

Separately, the Nationwide said the UK market remained “subdued”, with prices up 0.4% in February from a year ago.

‘Further deterioration’

Foxtons said annual revenues fell 5% to £111.5m, with the weakness in property sales being offset slightly by a “resilient lettings performance”.

The estate agent was pushed into the red by one-off charges of £15.7m, which included the costs of closing six offices: Beckenham, Enfield, Loughton, Ruislip, Park Lane and Barnes.

Foxtons said it was able to cover 85% of London from 61 branches and had no current plans for further closures.

“Our performance in 2018 was impacted by a further deterioration in the sales market, with transaction levels falling for another year from their already low levels,” said chief executive Nic Budden.

However, the company said that in the long term, London remained “a highly attractive property market”.

Weaker sentiment

The Nationwide said that house prices in February dipped 0.1% from the month before, with the average property now costing £211,304.

The Nationwide’s chief economist, Robert Gardner, said: “Indicators of housing market activity, such as the number of property transactions and the number of mortgages approved for house purchase, have remained broadly stable in recent months, but survey data suggests that sentiment has softened.

“Measures of consumer confidence weakened around the turn of the year and surveyors reported a further fall in new buyer enquiries over the same period.

“While the number of properties coming onto the market also slowed, this doesn’t appear to have been enough to prevent a modest shift in the balance of demand and supply in favour of buyers in recent months.”