London House Sales Slow Sharply Says Agent

The London-focused estate agents, Foxtons, has issued a profits warning saying it has endured a "sharp and recent" slowdown in sales.

The company, which floated on the London Stock Exchange (Other OTC: LDNXF - news) just a year ago as the London property boom gathered pace, saw a 15% drop in its share price in the wake of the announcement.

It said that while it had performed exceptionally well in the nine-months to June, the market had cooled dramatically more recently with quarterly sales commissions down 7.8% on the same period last year as reduced sale volumes offset price increases.

According to the most recent official figures from the Office for National Statistics, average London house prices climbed to £514,000 in August - leaping 19.6% year-on-year.

But a slew of more recent market surveys have pointed to growing caution on affordability, though the chances of a looming interest rate rise have since diminished given concerns about wage growth in the economy.

The studies also identified growing numbers looking for value outside the capital.

Foxtons, which has more than 50 branches, blamed the slowdown on political and economic uncertainty in the UK and Europe, tighter mortgage lending markets and mismatches between the price expectations of buyers and sellers.

The company said it now expected that market volumes in the second half of its financial year would be significantly below levels seen a year earlier and that underlying profits would be down on the £49.6m achieved a year ago.