It was just over a year ago that London estate agent Foxtons became the darling of the London Stock Exchange with a stonkingly successful IPO. Having floated at 230p, valuing it at £649m, shares in the company rose sharply to a peak of 285.5p in its first day of trading. By the end of February, Foxtons shares had risen to 398.8p, giving it a market cap of £1.1bn.
But what a difference a year makes. Yesterday, just hours after the chancellor had given the residential property an early Christmas present with the announcement of a total overhaul of the stamp duty system, Foxtons was quietly demoted from the FTSE 250, making way for luxury shoe brand Jimmy Choo to enter. Shareholders should have been cracking open the champagne: instead they were drowning their sorrows.
Investors knew it was coming: in October, the company issued a profit warning, saying a combination of economic uncertainty in the UK and Europe, tighter mortgage lending conditions and "mismatches between the price expectations of buyers and sellers" meant its adjusted earnings before interest, tax, depreciation and amortisation was likely to fall below its original forecast of £49.6m.
You can see its point: although in recent years Foxtons has made efforts to diversify out of central London, opening its signature nightclub-style offices in Hackney, Brixton and even Crystal Palace, much of its business still comes from its traditional "prime central London" market. Research by Knight Frank showed house prices in that market fell 0.2 per cent in November. In Notting Hill - where Foxtons opened its first office in 1981- prices fell 2.3 per cent.
And for London as a whole, data from rival estate agent Haart suggested house price growth slowed to 0.3 per cent between September and October, a stark contrast to the annual rise of 18 per cent.
Disappointing economic figures from Europe and Russia, where a lot of prime buyers come from, are deterring some from committing their cash to a London property, while slower growth in China means interest in the new builds traditionally peddled to Asian buyers is likely to wane in coming months.
The good news for Foxtons shareholders, though, is that this isn't the first time the company has been buffeted by economic headwinds. In 2007, founder Jon Hunt made what has since been seen as one of the most sweetly-timed pre-recession deals, selling a 75 per cent stake to BC Partners for £360m, just as the sky began to fall on the property sector. But the story had a happy ending: BC Partners raised £335m during Foxtons' IPO, and another £47.6m when it sold off half its remaining 14 per cent stake in September.
George Osborne's stamp duty announcement yesterday could help: it is expected to revive the housing market as a whole, which had been looking a little wan after the Bank of England placed restrictions on mortgage lending back in April.
Traditionally, with its focus on the top end of the capital's market, Foxtons would have been one of the few casualties of the changes as stamp duty on properties worth more than £2m rose. But with its expansion out of central London, who knows? Fast forward six months, and Foxtons could be back on track.