Estate agents are facing challenging times as Brexit uncertainties damp supply and demand in an already stuttering UK housing market.

A slowdown in house price growth, now at a six-year low, has deterred prospective sellers and reduced profits at most agencies, while the buy-to-let sector is retrenching following the 2016 introduction of higher stamp duty on the purchase of second homes.

“People are sitting on their hands,” said Mark Hayward, chief executive of NAEA Propertymark, a professional body for estate agents. “If a Brexit deal is struck, hopefully there will be some lessening of the logjam.”

The London market has been the heaviest hit, with property transactions down 12-15 per cent in 2018 against a 7-8 per cent fall in the UK as a whole, according to early analysis by Numis. Estate agents with a diverse portfolio that extends beyond the capital and residential lettings have been better placed to weather the market uncertainties.

Analysts believe a no-deal Brexit would weigh on employment confidence, with knock-on effects on house purchases, whereas an exit deal could lead to an uptick in house purchases from buyers who deferred in 2018.


As a London-centric company, Foxtons has felt the burn of the market downturn more than most, and this week reported its first full-year loss since its stock market debut six years ago.

The company, which lost £17.2m in 2018, down from a £6.5m profit in 2017, closed six of its branches over the year including its flagship Park Lane office. Revenues dropped 5 per cent to £111.5m.

“The London sales market is in a prolonged downturn and the current uncertainty surrounding Brexit is clearly impacting consumer confidence,” said Garry Watts, Foxtons chairman.

Although the estate agent’s lettings arm proved resilient, with revenues up 1 per cent to £67m, it is unclear how it will cope with a ban on tenant fees that takes effect in June.

Foxtons shares fell 35 per cent in 2018 to 53p, although they have since rebounded to 62p.

Mr Watts said the company expected trading conditions to remain challenging this year and planned to focus on cost control and digital marketing in the coming months, rather than opening up any further branches.


Many have questioned whether low-cost online agent Purplebricks can weather the challenges posed by a buyers’ market, in which the time between listing and sales is growing longer and sellers require increasing levels of advice and support.

“The company has had to pursue a very aggressive marketing strategy, which means they’re haemorrhaging cash,” said Mr Hayward.

The agency, in which fund manager Neil Woodford owns a 29 per cent stake, suffered a one-day share plunge of 25 per cent in February after it cut its revenue forecasts for this year by a fifth and lost its chief executives in both the UK and US.

Shares in the group have dropped below 140p, having traded at 426p six months ago before investors grew concerned about weakness in the UK housing market.

Analysts have criticised Purplebricks’ business model — the company charges no commission and instead requires vendors to pay an upfront “instruction fee” — for failing to provide agents with strong incentives for completing sales and only being suited to a sellers’ market.

The risk is that vendors will dry up if they are unconvinced Purplebricks’ agents can sell properties in the current market. The company has also faced questions over the number of homes it has actually sold.

None of its overseas operations are profitable. Analysts now expect group pre-tax losses to worsen to £40m-£50m this year.

Purplebricks downgraded its revenue forecast on the grounds of a “challenging” UK housing market, “headwinds” in Australia and a “slower than expected response” to its brand marketing initiatives in the US.


With only 11 per cent of its revenues attached to the residential market, and with a diversified housing portfolio across the UK, Savills has been less vulnerable to market volatility than some of its peers.

The company has been bolstered in part by a growing market in the Asia-Pacific region and its less transactional property management and consultancy services.

Its year-end trading update, published in January, stated that prospects for 2019 were threatened by macroeconomic and political uncertainties.

Although the group expected declines in transaction volumes in a number of markets, it remained confident this would be mitigated by growth in less transactional business lines. It forecast that its 2019 performance would be broadly consistent with last year’s.

Savills shares fell more than a quarter to 707p in 2018 but have rebounded over the past two months, recovering most of their value.

The company will release its annual results on March 14.

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