Estate Agent Countrywide Hit by Brexit Uncertainty
Countywide, the largest property group in the UK, have announced increasing losses for 2018 claiming Brexit uncertainty is affecting their trade.
The leading provider of estate agency and mortgage services in the country announced a loss of £218m last year, up from the £207m in losses experienced in 2017. The group warned that the outlook for the first half of 2019 wasn’t great either with the continued uncertainty surrounding the UK’s departure from the EU, and that earnings would take a hit.
The group owns several estate agent brands such as Bairstow Eves, Hamptons and John D Wood. They had already warned of a weakening market at the end of 2018 due to low consumer confidence surrounding Brexit. The company have issued a profit warning to investors.
“We encountered market weakness in quarter four due to the further uncertainties surrounding Brexit which is affecting both our sector and consumer confidence as a whole,” said Peter Long, the chairman of Countrywide. “These headwinds have continued into 2019. As a result, we are experiencing further slow-down in residential and commercial property transactions particularly in London and the south, which will affect our half one earnings by some £3million-£5million.”
Shares in Countrywide fell by over 15p, falling below 9p on Thursday. They were as high as 100p just a year ago. The company had a disastrous 2018, with former chief executive Alison Platt getting sacked following a profit warning. She was replaced by Mr Long.
“2018 was undoubtedly one of the most challenging years that the group has faced,” said Long. “As a group we are in a stronger position than we have been for some considerable time with sound business fundamentals and, despite the difficult market conditions we are facing, we remain confident in delivering our turnaround.”
On a more positive note for the housing market, a recent report from Halifax found that house prices rose in February by 5.9% from the previous month. According to the report, house prices were also up 1.8% in the three months leading to February from the previous quarter. The average price of a home in the UK now stands at £236,800.
Russell Galley, managing director at Halifax, said: “Annual house price growth at 2.8% is within our expectations, but is fairly subdued compared to 2015 and 2016, when the average growth rate was 8.3%.”
However, some experts weren’t confident that the house prices will continue later into the year, pointing to the fact that the market was particularly volatile.
Hansen Lu, a property economist at Capital Economics, said: “We wouldn’t put too much weight on the jump in house prices recorded by the Halifax index. Indeed, with all signs pointing to falling demand and weakening buyer sentiment, we think prices will rise by just 1% in 2019.”