Estate agent, Foxtons, has cautioned that the property market will remain static until the current period of economic and political uncertainty ends, that is, once the result of the general election in May is known.
Foxtons’ earnings before tax, interest, exceptional items and debt dropped to £46.2million, down 6.9% last year. This was pretty close to average forecasts produced by analysts. Their pre-tax profit hit £42.1million, up 8.2%.
Foxtons flourished after it was floated back in 2013 at the height of the resurgence in the property market and after the lows of the financial crisis years. However, the company issued a warning in October that its annual earnings were likely to come in well below the forecasts, as a result of a slowing in the London property market.
2014 was a year of two distinct halves. The first half saw a buoyant property market with transaction levels at their highest since 2008. However, the second half of the year was characterised by a sharp downturn in the volume of sales, most notably in central London.
In September 2013, Foxtons shares were listed at 230p in September 2013, hiking to 399p as February drew to a close and the London property market was booming. Since then, they have dropped by more than 50%.
Foxtons is wary about its prospects for the coming year. This contrasts to the outlook at Countryside, one of its major rivals, who believe the market will pick up soon after the general election.
The uncertainty surrounding the property market is complicated by the effect that Labour’s proposed mansion tax would have, should they win the election.
With the polls indicating that the results in May will be neck and neck, Foxtons are of the opinion that both sellers and buyers might take some time to become confident about any potential changes to property policy.