Foxtons warns on annual profits after housing market slowdown

The slowdown in the UK property market has hit estate agency group Foxtons, prompting a profit warning.

Foxtons said a sharp slowing of volume in London property sales markets in the last few months, following an exceptionally strong nine months to 30 June in which volumes hit post-2007 highs, had knocked its third quarter performance.

It said it expected the market to face constraints for some time due to economic and political uncertainty in the UK and continental Europe, tighter mortgage lending markets and asking prices that buyers were unprepared to match.

Foxtons said in a trading update from 1 July to date: "Market volumes in the third quarter have been more in line with the first half of 2013 and we now believe that market volumes in the second half of 2014 overall will be significantly below levels during the same period last year. Consequently, we expect full year 2014 adjusted pre-tax earnings before interest, depreciation and amortisation (EBITDA) to be below the prior year figure of £49.6m."

The group's third quarter turnover fell to £39.9m from £41.1m a year ago and group turnover for the nine months to 30 September was £112.7m against £103.7m a year earlier.

Third quarter adjusted EBITDA was £14.2m versus £18m beforehand and adjusted EBITDA in the nine months to 30 September rose 4.9% to £39.2m from £37.3m last time.

Shares fell nearly a fifth, by 40.5p to 164.8p, at 08:25 in London.