Foxtons shares (LON: FOXT) are down 5% on Thursday morning after the group reported a dip in revenue.
The London estate agent chain said in its latest trading update for the third quarter ended 30 September 2020 that group revenue was £28.5m, down 10% on the previous year.
A significant reduction in the number of overseas student tenants and corporate relocations led to an 8% decrease in lettings revenues.
Revenue generated from lettings totaled £19.5m, down from £21.3m a year previously.
Revenue from sales in the quarter also fell by 18% to £6.9m due to “depressed levels of exchanges, a hangover from the spring lockdown.”
Sales have since picked up, thanks to pent-up demand post lockdown and Stamp Duty relief. Revenue in September picked up by 9% on the previous year.
Mortgage revenue was £2.2m, up 4%, which reflects increased levels of re-mortgage activity.
The Bank of England said on Thursday that mortgage approvals in the UK have hit a 13-year high.
“The number of mortgage approvals for house purchase continued increasing sharply in September, to 91,500 from 85,500 in August. This was the highest number of approvals since September 2007, and is 24% higher than approvals in February 2020,” said the Bank of England.
Commenting on Foxton’s update, chief executive Nic Budden, said: “Foxtons has made good progress in the third quarter, during which we were able to capitalise on increased levels of market activity, driven by the decision to build back capacity soon after the lockdown ended. We have successfully re-built the sales commission pipeline to its highest level in 3 years, delivered a resilient lettings performance and progressed our lettings book acquisition strategy.
“Although the London residential market has gained momentum, we remain cautious as economic uncertainty causes more sales transactions to fall through and is putting downward pressure on rents. During these uncertain conditions, the energy and commitment of our people to go the extra mile enables us to deliver exceptional customer service whilst keeping our customers and employees safe.”
Foxtons shares (LON: FOXT) were down 5% this morning. Shares in the group have fallen over this past year from a high of 98.00p.