Countrywide, Britain’s biggest estate agent, said it had a record quarter despite a slowdown in the housing market that forced its rival Foxtons to issue a warning over profits.
In a trading update, Countrywide said revenue in the three months to the end of September rose 22% to £188m and pre-tax earnings before debt interest and other items increased 38% to £40m.
The company, which floated in March last year and has more than 40 brands, said its results showed the benefits of being spread throughout the UK in contrast to Foxtons’ focus on London.
Britain’s property market leapt back into life last year, led by soaring prices in London, but the market has since started to cool down. Nationwide Building Society said on Thursday that prices rose by a restrained 0.5% this month.
The slowdown hit Foxtons hard in the third quarter, prompting the aggressive London-focused chain to announce that annual profits would fall. Countrywide said it was on track for record revenues and profits this year.
Jim Clarke, Countrywide’s finance director, said: “When London is doing well, Foxtons do incredibly well but if London slows down a bit, which it has over the last two or three months, they’ve got nothing else to compensate for that.”
Foxtons blamed its problems partly on a mismatch between the expectations of sellers and buyers after a surge in London house prices. But Clarke said his agents in London were persuading sellers to reduce prices to suit the less frenzied market.
“This is what estate agents are paid to do. If someone was telling you your house was worth £1m and three months later they say it’s worth £950,000 you aren’t going to agree immediately. It’s the job of the agent to broker the transaction and that takes a bit of time.”
The number of house sales made by Countrywide through Hamptons and its other London-centred agents fell 9% in the third quarter to 1,704 but the number of sales outside London rose 11% to just over 18,000. Clarke said prices outside London were below previous peaks and would continue to recover.
“Our assumption is that there is still growth because people in the UK fundamentally still want to own their own house.”
Countrywide’s shares rose 1.7% to 458p in early afternoon trading – more than £1 higher than the 350p price at the time of the flotation. Foxtons shares rose 1.2% but at 162p they were 30% below its float price last September.
