London-focused estate agent Foxtons has blamed a plunge in profits on Brexit uncertainty and stamp duty changes which have driven sales in the capital to near record lows.
The company said waning consumer confidence against a backdrop of political uncertainty was weighing on the London housing market, driving a 65% fall in pre-tax profits in 2017 to £6.5m.
Foxtons said that changes to rules in 2016, when the government imposed a new stamp duty surcharge on second homes, had also contributed to a weaker market and falling profits.
Nic Budden, chief executive, warned 2018 would be another tough year.
“We are pleased to have delivered a performance in line with market expectations. However, sales activity in the London property market is near historic lows and this had a significant impact on our overall performance in 2017.
“Looking ahead, we expect trading conditions to remain challenging during 2018, and our current sales pipeline is below where it was this time last year.”
Revenue at the firm, known for its its fleet of minis and cafe-style offices, fell 11% in 2017 to £118m. Foxtons slashed its dividend payout to shareholders to 0.7p a share for 2017, down from 2p in 2016.
Budden said that despite the tough trading conditions, the London property market had “attractive long-term characteristics”.
UK-wide house builder Taylor Wimpey was more optimistic about prospects for 2018 after it had positive start to the year.
“We have been encouraged by early trading patterns at the start to the year and despite some wider macroeconomic uncertainty, consumer confidence remains robust and market fundamentals are solid,” said Pete Redfern, chief executive.
The house builder completed 14,842 homes in 2017, up 4.6%. It achieved an average selling price of £264,000 compared with £255,000 in 2016.
However, pre-tax profit fell 5.8% to £555m after a one-off charge of £105m related to payments made to customers who bought Taylor Wimpey homes on a leasehold basis – an ownership structure which has been criticised as unfair on buyers. The government is now proposing a complete ban on new houses sold as leasehold and reducing ground rents to zero.