• Foxtons records profit of £42m for 2014
• Typical fee increased to £13,000
• First half revenues were up 34% but second half plummeted by 17%
• Decline in revenue over second half mirrors eMoov’s Property Hotspots Index September Research
• eMoov highlighted a drop in London property demand of 28%
This morning Foxtons, one of the UK’s largest high street agents, released the results of their performance over the course of 2014. It made for interesting reading in a year where demand for housing in the capital finally peaked and started to fall, as the high street agent still recorded a profit margin of £42 million.
It hasn’t been a completely smooth ride for Foxtons during 2014 with the majority of their business being located in the capital. Back in September leading online estate agent eMoov.co.uk’s Hotspot Property Index highlighted a drop in demand for property in London. This was mirrored in the report released today by Foxtons, with their figures showing revenue tumbling by 17% from 34% in the first part of the year, as the London market began to cool.
Founder and CEO of eMoov Russell Quirk commented “We aren’t particularly surprised about their drop in revenue having predicted the market decline back in September through our eMoov Hotspots Index. What is surprising is that they can still make millions in profit despite the London downturn, this said the decrease in revenue does highlight their vulnerability to the ups and downs of the London market.
The increase in fees from £12,200 to £13,119 over the course of 2014 makes interesting reading. I would be even more interested to read their justification of charging such an amount as it seems the only validation is as prices rise, fees rise with them. At eMoov we charge one transparent, fixed fee regardless of whether your house costs £150k or £2 million as we believe everyone should receive the same service, irrespective of their property value”
For many the only option is to rent and the news that a flat near Bond Street was let within 40 minutes of going online, is crazy to say the least. Added to the fact it is a literal shoebox in size, the tenant was forced to pay £10,000 upfront to secure the place and she didn’t even view it first, the dire state of the London property market is more than apparent.
But while unsuspecting Londoners dance through hoops, the puppeteers orchestrating such madness are licking their lips. In the capital fees charged by traditional estate agents regularly hit 2.5% and Foxtons latest figures show that their typical fee has risen from £12,200 to £13,119 over the course of the year.