'Unprecedented economic and political uncertainty:' Profits at UK estate agents plummet

Reuters / Peter Nicholls

LONDON — Profits at Countrywide and Foxtons, two of the UK's biggest estate agents, fell sharply last quarter on a downturn in property transactions.

Countrywide, the UK's largest estate agents, posted a 98% collapse in pre-tax profits. Pre-tax profits for the half-year to June were £447,000, and operating profit — which excludes costs — dropped 77% to £6.5 million.

The group said the UK market for transactions was down 7% in the half-year, partly because people rushed to buy and sell homes before a stamp duty hike in April 2016.

The group did not pay out a dividend, which totalled 5p last year, having already cut its dividend in March and issued new shares to strengthen its balance sheet.

Alison Platt, Countrywide's chief executive said: "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."

"Unprecedented economic and political uncertainty"

Foxtons posted a 64% drop in first-half profits as it issued a stark warning about the capital's housing market. Its group revenues were also down by 15% from £68.8 million in the first half of 2016 to £58.5 million.

The group said its position mirrored London's stagnant housing market, which saw a 29% drop in transactions in the period.

Foxtons chief executive Nic Budden said: "Our performance has been resilient in the context of a London property market that has been further impacted by unprecedented economic and political uncertainty."

Shares in Countrywide, which dropped off the FTSE 250 index last year, were down over 10% at 9.18 a.m. BST (4.18 a.m. ET):

Investing.com

Shares in Foxtons were down over 4% at the same time:

Investing.com

NOW WATCH: THE BOTTOM LINE: Google's earnings overreaction and the raging debate over AI

See Also:

• 10 YEARS ON: How the global financial crisis transformed the UK housing market and priced out millennials

• REPORT: One in 5 estate agents is at risk of going bust

• How foreign investment firms exploit the UK property market with leasehold ground rents

SEE ALSO: How foreign investment firms exploit the UK property market with leasehold ground rents