Profits at the London estate agents Foxtons (LON:FOXT) have plummeted by 64 percent due to the sluggish property market and slowing demand.
The group’s profits for the first half of 2017 fell from £10.5 million to £3.8 million. Chief executive Nic Budden has blamed the “unprecedented economic and political uncertainty” for the poor results.
Budden has said that the market in London was “severely impacted” by the result of the referendum, which he said had led to a “substantial reduction in property sales transactions”.
Taylor Wimpey (LON:TW) said earlier this year that it believed that the risk of material impact on the market from the Brexit vote in the short term has reduced significantly.
“We have several new and exciting initiatives under way designed to build our lettings portfolio and strengthen our customer offer further,” continued Budden.
“While conditions remain challenging, we are confident that these initiatives, together with the strength of our network, our balance sheet and our brand will support long-term growth for our shareholders.”
Profits are at risk of being further affected when the government introduce a ban on one-off tenant fees.
Foxtons said in a statement: “As the lettings market grows, it is becoming more complex too, with significant new regulation, legislation and tax changes introduced in recent years,”
Other letting agencies have also suffered from a fall in profits at the end of this quarter. Countrywide (LON:CWD) saw profits tumble, by 98 percent in its case – down to £447,000 from £24.3 million.
“We are building a stronger business for our future and remain on track with our goals to broaden our digital capability, reduce our operating cost base and strengthen our balance sheet. Based on our current performance and the outlook for housing transactions in the UK, we expect our results and our leverage for the full year to be within the range of market expectations,” said Countrywide chief executive Alison Platt.