Member Article

Foxtons blames Brexit and stamp duty for 54% slide in profits

Estate agents Foxtons has posted marked declines across its property sales business as a combination of Brexit and stamp duty reforms have taken their toll on the property firm.

According to the group, which does the majority of its business within London, its profits were down 54% in the year to 31 December 2016, as a stark decrease in sales volumes fuelled a 23% dip in sales revenue.

Group revenue as a whole was also down, dropping to £132.7m from £149.8m in 2015, due to what Chief Executive Officer, Nic Budden, described as an ‘unprecedented series of events’.

By comparison, Foxtons’ letting activity remained somewhat more resilient to market pressures, with revenues down a single percentage point to £68.3m.

In a statement, Budden warned that if sales continued in the same vein as the second half of 2016 it was likely that Foxtons’ sales volumes for 2017 would likely be below those of last year.

He said: “Last year’s London property market was severely impacted by an unprecedented sequence of events with changes to stamp duty and the EU referendum vote leading to a substantial reduction in property sales transactions, especially in Central London.

“We were not immune to the decline in volumes, although our lettings business proved more resilient, whilst our mortgage broking business also performed well. We expect trading conditions to remain challenging throughout 2017. Should current sales activity continue through the remainder of this year, it is likely that 2017 sales volumes will be below last year.”