Monday 27 June 2016 8:05 am

London house prices: First of many? Foxtons issues profit warning after Brexit vote

Shares in struggling estate agent Foxtons plummeted as the market opened after it became one of the first property giants to issue  a profit warning off the back of the UK's Brexit vote.

Shares fell more than 16 per cent to 112.94p after the company put out a statement this morning saying challenging conditions it had previously referred to "are now likely to continue for at least the remainder of the year".

"We therefore expect full year 2016 group revenues and adjusted earnings before interest, taxation, depreciation and amortisation to be significantly lower than [the] prior year."

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The company has had a difficult few months, as fears over the outcome of the EU referendum combined with attempts by George Osborne to slow house price growth to push down sales for Foxtons, which focuses on the top end of London's property market.

Back in April it said new rules hiking stamp duty on buy to let homes had created a "reduced sales pipeline", adding that it expected the first half of the year to be "challenging"

"The run up to the EU referendum led to significant uncertainty across London residential markets and the decision to leave Europe is expected to prolong that uncertainty," it said. 

"While it is too early to accurately predict how the London property sales market will respond, the upturn we were expecting during the second half of this year is now unlikely to materialise."

"We said in our first quarter update that we expected the first half to be challenging ahead of the EU referendum," added chief executive Nic Budden today 

"Since then recent sales volumes have been slow as uncertainty and higher stamp duty has led many buyers and sellers to sit on their hands. The result of the referendum has increased uncertainty and is likely to mean that these trends continue for at least the remainder of the year."

Anthony Codling, an equity analyst at Jefferies International, added: "It appears that the shiny suits at Foxtons were not shiny enough and has issued a profit warning before the impact of the EU referendum has a chance to sink in, which, as we alluded to in April, suggests that the group needed a big second half to make numbers and that is a bet even super slick Foxtons is already unwilling to make."