Winkworth suffered a sales fall of 20% in the first half of the year, a trading update has revealed.

The firm says the first quarter was in line with its expectations, but the second three months saw a strong downturn.

It blames the steep rise in mortgage rates that was “higher and faster” than anticipated for the drop in sales.

“Property prices have held up reasonably well, but transactions have slowed, leading to a high number of agreed sales being delayed to the second half of the year,” the company said in a City statement.

Winkworth says preliminary figures show gross lettings revenue is up 11%, but sales have slipped 20%, giving an overall result for the agency of a 6% fall in income.

“As a result, the directors expect H1 2023 pre-tax profits to be below last year’s level,” the firm says.

Uncertain second half

“While the Directors believe that confidence will return once buyers can access a broader choice of mortgage finance, the outlook for sales in the second half of the year remains uncertain and the shortfall in H1 2023 means that full year pre-tax profits are likely to fall below market expectations.”

Winkworth revealed lacklustre final results earlier this year, well below the boom levels of 2021. Revenue was down 3% to £63.1 million (2021: £64.8 million) with sales revenues 54% of total revenues (2021: 60%).

The company did, however, deliver a clean balance sheet, with a year-end cash balance of £5.25m, slightly up from £5.02m in 2021, and no debt. It opened two new offices in 2022, down from six in 2021.

Traditionally concentrated in London as an upmarket agent, Winkworth does though have offices in other parts of the country such as Norfolk, Devon and Dorset.