The UK’s biggest two agents have reported on the impact of fewer transactions.
Countrywide this morning reported income for the first quarter was £162m – down 13% from £187m in the same period in 2016.
The group said this was “in line with our expectations”.
It said the first quarter of 2016 was boosted by the acceleration in transactions on buy-to-let properties and second homes in response to the impending changes to Stamp Duty which became effective April 1 2016.
Today’s trading update went on: “As expected, underlying performance in Q1 2017 was impacted by a continuation of the declining market trends seen in Q4 2016, resulting in a 29% reduction in house sales exchanges across the Group on a like for like basis.”
Countrywide also reported that the rollout of the digital sales proposition remains firmly on track, with the launch for Bairstow Eves now under way in addition to both Entwistle Green and Bridgfords that were launched earlier this year.
With these three key brands now in rollout in addition to the original pilots, the group said it is on track to achieve coverage by the digital model of around 50% (c. 400 branches) of the group’s total network by June.
Alison Platt, CEO said: “I am pleased that we have maintained the pace of our transformation agenda during the first quarter.”
“The snap general election called is not expected to significantly alter the overall level of market transactions for 2017 and we still expect the market to be around 5% below 2016 levels.”
Countrywide this morning also announced the appointment of a new non-executive director. She is Natalie Ceeney, most recently chief executive of HM Courts and Tribunals Service.
LSL, the country’s second biggest agent, this morning ahead of today’s AGM, also reported slower house sales compared with a year ago, but said its trading performance was “slightly ahead” of expectations.
In the three months to the end of March, estate agency revenue fell 5.5% year on year.
At flagship London brand Marsh & Parsons, revenue fell by 15.8%, reflecting reduced exchanges.
LSL, like Countrywide, said it expects to see fewer house purchase transactions this year.
LSL reiterated its strategy of growing profit per branch, expanding the number of Marsh & Parsons branches, and continuing to make selective acquisitions.
This morning’s statement also said the business is “exploring options to capitalise on digital opportunities created by the growth in consumer acceptance of online and hybrid estate agency business models”.
Analyst Anthony Codling of Jefferies said that Countrywide was doing its best to mitigate “a horrid second hand housing market”.
He said: “Although Countrywide may be down, it is not out and if what doesn’t kill us makes us stronger, we expect the group to emerge strongly from the storm once it has run its course.”
He said of LSL that the group was keeping its head down and delivering “in the face of a very challenging sales market”.