Foxtons sees property sales plunge as Brexit vote hits
Foxtons says revenue from property sales plunged 23% last year due to uncertainty following the Brexit vote as well as changes to stamp duty.
Profits at the London-focused estate agent more than halved as a result, falling to £18.8m last year from £41m in 2015.
Foxtons does not expect any let-up in 2017, warning trading conditions will "remain challenging".
Sales will fall further this year if current trends continued, it 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," said chief executive Nic Budden.
Despite the drop in property sales, revenue from lettings was more resilient, slipping just 1%, while its mortgage broking business performed well. As a result, the fall in overall group revenue was less severe, dropping 11.4% to £132.7m.
Price rises slow
Mr Budden said the group had a clear strategy to tackle the challenging market conditions, saying he was confident the group would deliver "long term growth", and said he expected London to remain "a highly attractive property market for sales and lettings".
London property prices have risen sharply in recent years owing, in part, to its attraction to overseas investors. However, price increases slowed last year, partly due to a new stamp duty surcharge facing overseas investors.
During 2016, the average price of Foxtons' property sales was £568,000, up from £550,000 in 2015.
The group had already warned that the result of the EU referendum, in which the UK voted to leave Europe, would affect London's housing market.
Foxtons currently has 67 branches across London and the home counties.
Earlier this month, building society Nationwide said UK house prices had accelerated in February with property values rising by 4.5% in a year.
However, it said the outlook for the market was uncertain, predicting a 2% rise in UK house prices over the course of the year.
George Salmon, equity analyst at Hargreaves Lansdown, said Foxtons was "bearing the brunt of the troubles facing the London property market".
He said that while investors could take comfort Foxton's lack of debt and the reliability of its rental business, "sales dropped sharply in the second half of 2016, and the early indications are that this trend is continuing into 2017".
"Considering the group's gloomy outlook, it appears the uncertainty around the capital's property market won't be shifting in the short term."