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| Version 1 | Version 2 |
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| Countrywide warns over profits amid housing slowdown | Countrywide warns over profits amid housing slowdown |
| (about 1 hour later) | |
| The UK estate agent Countrywide has said the fallout from the Brexit vote and changes to stamp duty mean transactions are significantly lower than last year and likely to fall further in 2017. | The UK estate agent Countrywide has said the fallout from the Brexit vote and changes to stamp duty mean transactions are significantly lower than last year and likely to fall further in 2017. |
| Shares plunged another 14% to a record low of 167p after the company said sales in London had fallen 29% in the third quarter and warned that profits in the full year would be at the lower end of market expectations. | Shares plunged another 14% to a record low of 167p after the company said sales in London had fallen 29% in the third quarter and warned that profits in the full year would be at the lower end of market expectations. |
| The drop was largely blamed on the impact of uncertainty arising from the referendum result, which Countrywide said had been greater than expected. The market had been forecasting underlying profits of between £85m and £100m in 2016. | The drop was largely blamed on the impact of uncertainty arising from the referendum result, which Countrywide said had been greater than expected. The market had been forecasting underlying profits of between £85m and £100m in 2016. |
| Property sales are expected to fall 6% in 2016. Alison Platt, Countrywide’s chief executive, said there was nothing to suggest sales would pick up in the year ahead. “We don’t expect the market conditions for sales to change over the next year. We can’t see any catalyst for it. Taking this business forward is going to be about self help. The market isn’t going to do us any favours.” | Property sales are expected to fall 6% in 2016. Alison Platt, Countrywide’s chief executive, said there was nothing to suggest sales would pick up in the year ahead. “We don’t expect the market conditions for sales to change over the next year. We can’t see any catalyst for it. Taking this business forward is going to be about self help. The market isn’t going to do us any favours.” |
| The outlook is weaker across the UK, according to Countrywide, but particularly in London, where the number of homes sold fell 29% to 2,484 over the three months to 30 September. Group revenue in the third quarter fell by 4% to £188.5m. | |
| The gloomy update came despite evidence of consumers’ resilience in the months following the referendum. Consumers continue to be the main driver of wider economic growth. | The gloomy update came despite evidence of consumers’ resilience in the months following the referendum. Consumers continue to be the main driver of wider economic growth. |
| Jim Clarke, Countrywide’s finance director, said there was a big difference between people spending money on smaller, everyday items, and their willingness to commit to buying a home. | Jim Clarke, Countrywide’s finance director, said there was a big difference between people spending money on smaller, everyday items, and their willingness to commit to buying a home. |
| “No one can really show them what the future is,” said Clarke. “There’s a real lack of clarity on what post-Brexit Britain looks like.” | “No one can really show them what the future is,” said Clarke. “There’s a real lack of clarity on what post-Brexit Britain looks like.” |
| The company pointed to Bank of England figures showing mortgage approvals were 12% lower in the third quarter compared with the same period last year. | The company pointed to Bank of England figures showing mortgage approvals were 12% lower in the third quarter compared with the same period last year. |
| The gloomy update came a day after Philip Hammond dealt a blow to estate agents, revealing plans to clamp down on upfront letting fees charged to tenants. Delivering his autumn statement on Wednesday, the chancellor said fees often amounted to hundreds of pounds. | The gloomy update came a day after Philip Hammond dealt a blow to estate agents, revealing plans to clamp down on upfront letting fees charged to tenants. Delivering his autumn statement on Wednesday, the chancellor said fees often amounted to hundreds of pounds. |
| He said: “This is wrong. Landlords appoint letting agents and landlords should meet their fees. We will ban fees to tenants as soon as possible.” | He said: “This is wrong. Landlords appoint letting agents and landlords should meet their fees. We will ban fees to tenants as soon as possible.” |
| News of the policy wiped millions off the value of Countrywide on Wednesday, along with others in the sector. | |
| Platt said on Thursday that she looked forward to working with the government during the consultation process. | Platt said on Thursday that she looked forward to working with the government during the consultation process. |
| “As ever, the devil is always in the detail. Let’s be sure there are no unintended consequences here.” | “As ever, the devil is always in the detail. Let’s be sure there are no unintended consequences here.” |
| The Association of Residential Letting Agents has warned that the policy could be counterproductive, because the costs would be passed on to landlords who would, in turn, raise rents to recoup the costs. | The Association of Residential Letting Agents has warned that the policy could be counterproductive, because the costs would be passed on to landlords who would, in turn, raise rents to recoup the costs. |
| Countrywide said changes to stamp duty in the first quarter resulted in a larger-than-usual supply of rental properties, weighing on rental growth. In some areas, rents fell. | Countrywide said changes to stamp duty in the first quarter resulted in a larger-than-usual supply of rental properties, weighing on rental growth. In some areas, rents fell. |
| Neil Wilson, a markets analyst at ETX, described Countrywide’s assessment of the property market as “very downbeat”. | Neil Wilson, a markets analyst at ETX, described Countrywide’s assessment of the property market as “very downbeat”. |
| He said: “The company says it’s making good progress but today’s trading statement confirms that estate agents are facing a troubled future. | He said: “The company says it’s making good progress but today’s trading statement confirms that estate agents are facing a troubled future. |
| “Wednesday’s autumn statement bombshell banning letting agents from charging upfront fees to tenants couldn’t have come at a worse time for the sector. The trading statement presumably doesn’t take stock of this change so we could see a greater adverse effect as a result.” | “Wednesday’s autumn statement bombshell banning letting agents from charging upfront fees to tenants couldn’t have come at a worse time for the sector. The trading statement presumably doesn’t take stock of this change so we could see a greater adverse effect as a result.” |