Foxtons (LON:FOXT) reported a slowdown in property sales in the capital, with figures shrinking by more than a third over the last quarter.
Revenue from property sales dropped to £12.2 million in the three months to the end of September, down 34 percent as a result of lower transactions in the capital.
Chief Executive Nic Budden stated: “The long term fundamentals of the London property market remain very attractive and represent a huge opportunity for growth with nearly £3bn in total sales and lettings commissions on 2015 volumes.”
“We have built Foxtons to withstand sales market cycles”, he added.
“The long-term fundamentals of the London property market remain very attractive and represent a huge opportunity for growth.”
Adjustments to stamp duty rates introduced in April 2016 by George Osborne have been a key deterrent for London property buyers. The capital has been disproportionately affected by said increases due to high property prices in the region, with the average London house price rising to around £489,000, compared to the countrywide average of £219,000 in August 2016.
Foxtons, who have a strong presence in central London, also noticed a slower demand from tenants. However, the company noted that its lettings division, which makes up a large majority of its business, helped to mitigate the effect of profit decline in property sales in the capital. However, lettings revenue did grew “modestly” from £22.6 million to £22.8 million, stimulated by the various marketing initiatives launched by Foxtons over the last quarter.
The FTSE group saw revenue fall by 14 percent to £37.5 million between July and September. Prior to these figures the real-estate agent issued a profit warning on profitability concerns in the wake of Brexit. Despite these developments, Foxtons shares have remained relatively unaffected, with shares up 2.1 percent in early trading.