Sales down by one-third at estate agents

Jun 12 2009 by Peter McCusker, The Journal

NEWCASTLE estate agency your-move.co.uk has seen sales plummet by more than a third to £47m – as well as posting a loss of £5.7m – as the housing market slowed last year.

But with a well-capitalised parent company, it says it is “well-placed to deliver significant growth” as the market begins to improve.

The firm, part of stock market-listed LSL Property Services group, is based at Albany Court on Newcastle Business Park, where it employs 70 staff and another 1,000-plus across the UK.

In 2008 it saw sales plummet from £74.5m to £47.4m as it was involved in 10,000 fewer transactions from its network of 300 branches and its internet presence. Healthy pre-tax profits of £6.7m fell to a pre-tax loss of £5.7m last year.

It said: “Turnover decreased by 36% during the year as a result of a reduction in exchange fees as the housing market deteriorated. The decrease has been offset by increased income from lettings, home information packs and other income streams. The reduction in operating results reflects the deterioration of the housing sales market.”

Its results are in line with those of some competitors and there is some optimism that recent signs of life in the housing market will see the picture change soon.

In the past month house prices have risen 1% and mortgage approvals by 50% since the turn of the year. Figures yesterday from the Council of Mortgage Lenders noted a 16% jump in mortgage lending to home buyers in April, the most since last October.

In April LSL issued a trading statement for the first quarter showing estate agency sales down 32%

LSL chairman Roger Matthews said: "We are pleased to report that, against a market backdrop that continues to be challenging, overall the group has traded slightly better than our expectations. The volume of house purchase transactions continues to be at an historic low, but more recently the level of buyer inquiries and activity in our estate agency business has been encouraging.

“The group will also benefit from a substantially reduced cost base in 2009 and the continued growth of counter-cyclical income stream businesses, such as lettings and repossessions asset management.”