London’s Largest Estate Agent see’s House sales Decline
Has exiting Europe and new higher stamp duty caused a housing decline around the UK? Foxtons, who are London’s most renowned estate agent, have said that the housing market has been significantly affected by the events of last year. This is particularly apparent for the most expensive areas of the London property market.
Foxtons has disclosed that the upcoming year could prove problematic for people who need to sell their house fast. Foxtons revenue dropped a significant £17m from £150m to £133m during the same period between 2015 to 2016. Foxtons has proposed that if demand does not increase then 2017 could be a challenging year and sale volumes will probably be lower than they were in 2016.
Brexit is Directly Associated with the Property Slump
Foxtons has suggested that the decline in their revenue from lower housing activity is in direct relation to the EU referendum causing, economic uncertainty and April’s 3% stamp duty increase also didn’t help. Additionally, the disconnect between average income and housing prices in recent years.
Investors have also taken note of the decline in housing activity. Traders were quick to sell shares in the company and Foxtons shares declined 12% the day the update was published and an overall 5 per cent plummet during that trading session.
London has been Foxtons center of activity but mortgage lender, Nationwide, published a report that London has grown slower than the national average – something that hasn’t happened in more than 8 years. The London property marked has slowed in recent months with both supply and demand declining. The £1million plus properties in the capital have particularly slowed due to the stamp duty changes. Foxtons is planning to open two more offices outside of London by April to help diversify their London-centered market.
Foxtons is not too worried about the decline in property trades in the short-term because their letting revenue has proved resilient at £13million in the fourth quarter, more than half of the estate agent’s profits for the final quarter. The high volume of renewals signifies a market that is ready to rent but not yet buy.
Both Buyers and Sellers are Affected
What does the Foxtons report mean for both the property buyers and sellers? There is a need for more house sellers to sell to quick house buyers. The internet has changed the way the world does business and Estate Agents aren’t protected from its affects. House sellers are discovering that they can’t sell their home for market value on the open market. As more and more people turn to the internet to do business, online house buyers and auctions have received increased demand from sellers who require a quick sale.
Uk To Grow Slower than the rest of the World
The World Bank forecast has predicted a global growth this year but in contrast they believe the UK’s growth will slow from 2% to 1.2% and global recruiter group Page Group said their UK profits fell by almost 7% despite seeing global growth earnings. The Brexit uncertainty will continue to have a negative effects on the UK economy, including the property market. Selling your property on the open market may will take a quick strategy to sell your house fast and for a profit.