Countrywide shares plummet as transactions fall
Shares in the UK's biggest estate agent, Countrywide, have plummeted following the publication of its gloomy report on the property market.
Thursday's 12% fall comes on top of a 5% drop following the news that letting agents fees are to be scrapped.
In its third quarter trading update Countrywide said it expected transactions to fall because of stamp duty changes and the Brexit vote.
Group revenue was £188.5m compared with £197.1m for the same time last year.
The group, whose 55 high street brands include Bairstow Eves, John D Wood and Gascoigne Pees, forecast transactions would be 6% down this year, and for levels to fall even further in 2017.
The company said the reduced level of market transactions it had seen in the second half of this year would lead to its 2016 profits being at the "lower end of expectations".
Countrywide said figures for the three months to the end of September showed that overall house exchanges were down by 1% compared with the same time last year, however in London they were 29% lower.
It also said mortgage approvals were 12% down on the same time last year.
The lettings side of the business was affected by the rush to beat the changes in stamp duty at the end of the first quarter of the year, which resulted in a larger than usual supply of rental properties, it said in its statement.
In the three months to the end of September residential lettings were up by 14% and in London they rose by 1%.
News of the ban on letting agents' fees announced in Wednesday's Autumn Statement was described as a "hammer blow" to estate agents.
Countrywide's chief executive Alison Platt said the company was looking forward to working with government on the "consultation".
"We have made good progress this year despite tough market conditions since the EU referendum," said chief executive Alison Platt. "Particularly pleasing is our growth in market share in both sales and lettings."
However, ETX Capital markets analyst Neil Wilson said: "Countrywide shares are tumbling again this morning after it offered a very downbeat assessment of the property market.
"The company says it's making good progress but today's trading statement confirms that estate agents are facing a troubled future.
"Yesterday's Autumn Statement bombshell banning letting agents from charging upfront fees to tenants couldn't have come at a worse time for the sector. The trading statement presumably doesn't take stock of this change so we could see a greater adverse effect as a result," he added.