Foxtons annual profits will collapse 80 per cent following its “toughest ever” year in London, the estate agent has forecast.
Adjusted profits will be just £3m, compared to £15m last year as sales volumes fall and costs increase, Foxtons said. Transactions in the capital fell in 2018 from the previous year’s already historic lows.
The capital has been most acutely affected by a recent downturn in property prices, particularly in “super-prime” areas such as Kensington and Chelsea.
Ultra-rich foreign buyers have been put off by Brexit, higher property taxes and tougher controls around money laundering.
As they have pulled their money out the effects have cascaded down to other parts of the market where confidence is already low thanks to the uncertainty around the UK's economic future.
Buy-to-let investors have also faced higher tax payments and lower tax relief on mortgage interest payments.
Foxtons, has borne the brunt of these trends and has closed branches as a result. The estate agent, famed for its fleet of green Minis and lounge-style, glass-fronted branches, has become a symbol of a wave of gentrification and rising prices in London.
It is now suffering as that trend goes into reverse. House prices have inched up 0.1 per cent across the UK over the past year and have fallen in the capital.
Chief executive Nic Budden said “2018 was one of the toughest sales markets we have ever had in London with transactions falling from last year’s historically low levels.
“Considering this, we have delivered a solid performance and taken steps to ensure the business is best prepared for these conditions through prudent actions on cost and enhancements to our proposition.
“We are confident in our model which provides high levels of service to achieve the best results for our customers.”
