One of London’s major high-end real estate brokerages has issued a profit warning just days after the shock Brexit vote.
Shares in Foxtons, whose agents drive around the city in green minis, plunged 23% Monday and were temporarily suspended after it said that while it is too early to accurately predict how sales will respond to the Brexit, the upturn it was expecting during the second half of this year is now unlikely to materialize.
The run up to the EU referendum led to significant uncertainty across London residential markets and the decision to leave Europe is expected to prolong that uncertainty, according to Foxtons.
“Recent sales volumes have been slow as uncertainty and higher Stamp Duty has led many buyers and sellers to sit on their hands,” said Nic Budden, the chief executive of Foxtons. “The result of the referendum has increased uncertainty and is likely to mean that these trends continue for at least the remainder of the year.”
As a result, he warned that Foxtons’ full-year revenues and profit are expected to be significantly lower than in the previous financial year.
MORE:New York Luxury Real Estate Market Could Benefit from Brexit
Elsewhere in the London market, brokers were reporting a muted domestic market, but increased interest from international buyers, although most were holding off from making any key decisions until they could get a clearer picture of the landscape.
“Interest over Friday and the weekend from domestic U.K. buyers is very muted, the biggest interest is from overseas buyers, people from the Middle East, India and Asia watching the marketplace to see which way prices go,” Peter Wetherell, chief executive of Wetherell, a Mayfair-based brokerage, said.
MORE:High-End London Brokers Face ‘One of the Busiest Days’ After Brexit Vote
“With the pound now dropped, London has become potentially lucrative again to overseas investors,” Mr. Wetherell said. “I’ve been speaking to all our clients over the last three days – most want to wait to see what impact Brexit has over the next few weeks on the London economy and housing market. Then they will make decisions on their real estate assets.”
Guy Gittins, sales director for Chestertons, added that his brokerage is already seeing a renewed appetite from cash-rich Europeans and people dealing in dollars, who are in a very strong position on the back of the pound’s plummeting value.