Profits at the UK's largest estate agent have fallen 98 per cent

Emma Haslett
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The company owns brands including Hamptons International

Countrywide, the UK's largest estate agent, said profits had almost been wiped out in the first half of the year thanks to uncertainty.

The figures

Pre-tax profits fell to £447,000 in the six months to the end of June - down 98 per cent from £24.3m during the same period last year. Meanwhile, revenues fell from £359.9m to £327m.

The fall was partly driven by a dive in the number of transactions: house sales exchanged fell 20 per cent from 33,940 in the first half of last year to 27,100 this year, while exchanges in London fell 24 per cent, from 5,702 last year to 4,351 this year.

Market share edged lower to 4.9 per cent, from 5.1 per cent in 2016, but the company said it had cut costs by £27m year on year.

That wasn't enough for investors, though: shares dived 9.5 per cent to 148.8p in early trading.

Why it's interesting

The UK's housing market, which until recently was on a seemingly unstoppable upward trajectory, seems to have finally found its kryptonite. The heady combination of Brexit and changes to stamp duty rules has led to lower-than-ever supply and unprecedented amounts of uncertainty in the market as Britons decide to stay put, rather than moving house.

That can be seen in various data points: last week official figures showed the number of homes being bought and sold in the UK had reached its lowest level since last October, while mortgage data yesterday showed the number of loans handed out had fallen to a nine-month low in June.

It's worth pointing out that the comparison to last year's first half is slightly skewed by the fact housing transactions jumped just before the government introduced new rules on stamp duty in April last year. But that doesn't account for all of Countrywide's present woes.

At least the company, which owns dozens of estate agency brands including Hamptons, can take solace in the fact it's not the only estate agent suffering: today rival Foxtons reported a 64 per cent fall in profits.

Alison Platt, Countrywide's chief executive, tried to look on the bright side: "'Self-help' remains our mantra," she confessed today.

What Countrywide said

Platt added:

As anticipated, the first half of 2017 was tough for the group compared to the same period last year given the high levels of housing transactions brought forward in time as a result of the stamp duty changes and the EU referendum. Our income versus the first six months of 2016 is down 10 per cent and our adjusted earnings before interest, taxation, depreciation and amortisation down 26 per cent.

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