Countrywide/foxtons: not the best time to be an estate agent

After four profit warnings in the past eight months, Britain’s biggest chain of estate agents, Countrywide, “is putting the finishing touches to a call for up to £125m of emergency finance”, said Larry Elliott in The Guardian. Revenues have been hit by “a sharp downturn in house sales” and “competition from online rivals is intense”. Shares in the group, which has debts of £200m, have plunged 70% in the past year.

The situation at its London-based rival Foxtons is marginally better, said The Times. At least the outfit, renowned for its shiny offices and trademark Mini fleet, is debt free and the City is confident it can pay its dividends. “And while Foxtons’ image may be a bit 1980s, it has not actually been pushed aside by the online newcomers.” Still, the share price has dropped from a peak of 386p in March 2014 to as low as 46p last month. And this week’s half-year figures were hardly aspirational: Foxtons filed a £2.5m loss, compared with a £3.8m profit for the same period last year.

“One would think a cursory glance at the market dynamics would counsel against investing in an estate agent right now,” said Matthew Vincent in the Financial Times. “Last year, house prices in London began falling for the first time since 2009”, according to Nationwide. Meanwhile, the latest data from property adviser LCP show prime Central London prices down 8% year-on-year. Yet that hasn’t deterred several intrepid fund managers from upping their holdings in Foxtons, possibly encouraged by signs of a recovery in letting revenues. These aren’t the best of times for the housing market. But the thinking seems to be that Foxtons “is in a better location than its estate agent neighbours”.