Foxtons yesterday revealed lower than expected income causing their share price to drop another 6% as the finance director departed. The reduction in recent years is now around 70%.
The falls follow on from the UK’s biggest agents Countrywide dropping to another all-time low with a drop in share price of 99% since 2014.
Countrywide operate brands such as Mann in Woolwich and Hamptons in Greenwich and have embarked on closures across the UK. Many more branches are expected to follow.
Both agents charge some of the highest letting fees in the market – and next week’s ban will further hit both groups.
In many ways it was the greed of some agents that led to the ban to begin with – and as five million people now rent privately (doubling in 20 years) politicians now realise the voting potential of private renters.
Foxtons are notorious for high tenant fees running into hundreds of pounds for mundane tasks such as credit checking and basic alterations to tenancy agreements when a tenant changes. Their letting business has been doing relatively well compared to the sales side. The ban could now cause extra hardship.
Years of double digit house price growth thanks to government intervention in the market led some to forget history. It’s simply not sustainable for double digit annual growth to continue and vastly outstrip annual rises in wages. Add Brexit and issues are exacerbated.
Foxtons do have cash in the bank (though do not look like turning a profit soon) whereas Countrywide is saddled with debt. How long they can continue is the big question.