Well known estate agents Foxtons has seen its share price hit new all-time lows again today as estate agents across the UK hit tough times. The UK’s biggest agent Countrywide is today also down 7% as numerous issues hit the sector.
Foxtons has sunk below 60p a share. The five year chart shows the extent of decline.
Back in 2014 it was at 400p.
It’s a similar story at the UKs biggest agency Countrywide which is down 7% today, which has numerous sub-brands including Mann and Bearstow Eves. The company also has a large debt pile and has issued numerous profit warnings over the past year.
It’s seen falls from near 700p to 85p today.
Both company’s have long earned sizable income from charging prospective private tenants extremely high fees for simple tasks alongside charges and services to landlords that have received negative press attention.
Some of the practices from other agents towards tenants is captured here.
And now legislation is passing through Parliament to ban such fees, as already exists in Scotland, Wales and other nations.
This has spooked investors. Add in a housing market that appears to have peaked and may be in a “slump”, as Berkeley Homes stated yesterday, and agents are in trouble. Affordability for homes is minimal for many younger people (including those on very good earnings) and there’s only so long they can rely on people who benefited from house price increases selling to each other.
Government has been stepping in for years to prop up prices and support housebuilders and estate agents (so much for free market supporting Tories) but that appears to be running out of steam. How many more tricks can they pull?