Countrywide, the UK’s largest estate agent group has issued a second profit warning this year after shares dropped by nearly 30%. The group employs nearly 8,000 staff nationwide, but has shed 150 of their 450-head office team in an effort to cut costs.
The group, which includes brands such as Bairstow Eves and Gascoigne Pees, is expecting its first half year earnings to be about £20 million lower than the previous year. A representative confirmed that a recovery of the shortfall was not expected in the second half of the year. Countrywide said that the housing market continues to be ‘subdued’ with housing deals taken longer to go through.
Generally, online agents are becoming increasing popular, as more people look to find the best deals by cutting out the ‘middle man’. Purplebricks says it is doing well in the UK, although the company recently reported a pre-tax loss of £26.1 million after its international expansion into the US, Australian and now Canadian markets, and sold an 11.5% stake in a German publishing group.
Another big estate agent chain, Foxtons, has reported a slump and warned that, in particular, the London housing market is suffering from historic lows. This could be due to more people renting and high London house prices. The government is debating whether to introduce a minimum tenancy term of three years to give people who are renting homes in England added security.
The average number of properties for sale on estate agents’ books is at a 40-year low at 42.5, a trend predicted by the Royal Institution of Chartered Surveyors (RICS) to continue. In June, the number of new instructions fell for the sixteenth consecutive month. Most surveyors blamed ‘political uncertainty’ (double those who blamed Brexit, although the two are closely linked) for their pessimistic outlook.
When buying property in London or anywhere else in England and Wales, make sure you get an Independent Chartered Surveyor to carry out a survey on your property.