Countrywide plc happens to be the UK’s biggest estate agency with 1,000 plus offices. They are warning that there is a tough spring ahead for estate agents in the UK in 2008.
The company's finance director states that the present state of the property market is difficult to predict.
Based on the trend of mortgage approvals and the time lag between mortgage approvals and exchanges, spring 2008 is going to look tough for estate agency.
Mortgage approval trends peaked in November 2006. They had been weakening prior to the Northern Rock crisis.
The company had already cited a weaker housing market in a report to City experts and institutional investors in September for the first six months of 2007.
Herein, Countrywide sold somewhat fewer homes in the first half of 2007 than in the first half of 2006. Estate agency revenue went up slightly, yet estate agency profits decreased, due mainly to lower commission rates.
House exchanges were 48,600, 1% less than 2006, while estate agency revenue went up about 5% to approximately £175m. Yet profitability declined by 16% from £21m to £18m.
‘Pipeline’ sales totalled nearly £100m at the end of June 2007, more or less the same as at the end of June 2006, with signs of the property market further weakening.
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Spring 2008 Is Going to be Tough
Wed, 17 Oct 2007
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