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| UK's largest estate agent Countrywide issues profit warning | UK's largest estate agent Countrywide issues profit warning |
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| Shares down by almost a fifth as number of UK property sales fall and surveyors report fewer inquires | |
| Julia Kollewe | |
| Thu 18 Jan 2018 18.05 GMT | |
| First published on Thu 18 Jan 2018 09.29 GMT | |
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| Shares in the UK’s largest estate agent, Countrywide, have tumbled by nearly a fifth after the group issued its second profit warning in three months amid a stalled property market. | |
| Countrywide, whose high street brands include Hamptons, Bairstow Eves, Taylors and Gascoigne-Pees, said it had had a disappointing last three months, especially in London and the south-east, with full-year revenues down £65m on a year earlier. It warned that 2017 profits would fall short of forecasts and be 22% below those for 2016. Its shares closed on Thursday down 18.6% at 110p. | |
| Countrywide said last year that the Brexit vote had had a sustained impact on the property markets, with fewer people looking to buy or sell. New online competitors are also hitting traditional agents, say analysts. Countrywide, which has a stockmarket value of £262m, has closed 200 branches and now has 800. | |
| The latest profit warning dragged down shares of other estate agents, with Foxtons falling 5.7% and the property website Rightmove down 3.6%. | |
| It also came as a survey of Britain’s chartered surveyors showed that activity in the housing market continued to drop in December, despite the abolition of stamp duty for first-time buyers for properties up to £300,000 the month before. | |
| The Royal Institution of Chartered Surveyors said the vast majority (86%) of its members surveyed had not seen any increase in inquiries from first-time buyers in December. | |
| Analysts at the investment bank Goodbody said: “Monthly indicators such as Rics can be noisy, but the general message of the survey is that with relatively sticky prices, the first stage of a housing downturn – that of falling activity in the context of a buyer/seller standoff – is in train.” | |
| The number of inquiries from new buyers fell last month, according to Rics, with a balance of 15% noting a decline in demand. Agreed sales also dropped across the country, with a balance of 13% reporting a decline in volumes. | |
| Simon Rubinsohn, Rics’ chief economist, said: “The initial feedback from the market doesn’t suggest that the change in the stamp duty regime announced in the budget is going to have a material impact on activity. | |
| “The risk was always that a good portion of the benefit would be capitalised in the price, therefore limiting the benefit for the first-time buyer.” | |
| The report indicated that prices may have inched up to take account of buyers’ stamp duty savings. It showed the balance of surveyors reporting higher prices moved to 8% after a reading of zero in November. | |
| Sales expectations among the agents and surveyors questioned for Rics report remained flat for the next three months but were more upbeat for the whole year. | |
| But many forecasters are expecting the housing market to slow further in coming months and have pencilled in UK price growth of about 1% in 2018. London prices are expected to continue to slide, in stark contrast to the 70% growth seen across the capital over the past decade. | |
| Countrywide warned in November that the sales market was challenging and would be down compared with 2016. On Thursday, it warned that 2017 profits would now fall to £65m, from £83.5m in 2016, after the poor fourth quarter. The new estimate is about 10% below some analysts’ forecasts. | |
| Income in the UK sales and lettings business is expected to fall by 17% to £205m. London will contribute £155m, down 10% year on year. Overall income for the year, including financial services and its business-to-business bands such as Lambert Smith Hampton, is expected to fall to £672m from £737m. | |
| Countrywide shares lost nearly a third of their value last year. In August, the company said its chief executive, Alison Platt, would take on more responsibilities as the company undergoes restructuring. | |
| Analysts at Jefferies said residential property markets were more challenging in 2017 than Countrywide anticipated. “To combat these challenges the board took tough decisions last year adjusting the leadership team and changing the strategic direction of the group. Changes will take time to flow through to results.” | |
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| Property | Property |
| Housing market | Housing market |
| House prices | House prices |
| Real estate | Real estate |
| Economics | Economics |
| news | news |
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