Foxtons revenues across its three core areas of business fell during the first three months of the year compared to the same period of 2016, the company has revealed.
Commission from sales sank by 44.5% from £20m to £11.1 million, lettings revenues were down slightly from £15.8m to £15.5m and mortgage broking fees fell by £500,000 to £2.1m.
The company says the dramatic drop in sales revenue has been created by last year’s rush by landlords and second homes buyers to buy properties before the Stamp Duty increase deadlines.
This has left a sizeable hole in its first quarter 2017 group revenues which dropped by 25% from £38.4m last year to £28.7m. But Foxtons’ board says this was “expected”.
Similar reductions in revenue particularly from sales commissions reported in its 2016 accounts were said by Foxtons chairman Garry Watts to be caused by a substantial reduction in transactions in London, driven principally by rising house prices, stamp duty changes and the EU referendum.
The results have pushed the company’s strategy off-course somewhat – it’s stated aim to investors for some time now has been to target “higher-volume, higher-value residential property markets within London”.
Its shares on the London stock exchange fell nearly 1.5% following the trading statement, although despite the bleak news from the London market, its shares have in general been rallying since the end of March.
Foxtons says it will release its interim results for the first half of 2017 on July 27th.