Foxtons reports 50% rise in mortgage business in H1
In its H1 results, the group said the Help to Buy scheme had driven ‘exceptionally strong growth’ which led to the generation of £3m of revenue during the six months to 30 June, compared to £2m the year before.
Revenue generated from property sales surged by 32% from £28.5m in H1 2013 to £37.8m this year while lettings revenue remained flat at £31.8m.
But CEO Nic Budden warned that despite the group’s strong results in the first half of the year, market calming measures introduced by Mark Carney will slow down growth.
“The range of policy initiatives introduced in 2014 aimed at controlling mortgage lending, together with the expectation of early increases in interest rates, is now having an impact on short-term demand among buyers.
“Consistent with others in the sector, we expect this to lead to lower rates of market growth in both property sales transactions and prices during the second half of the year.”
The group posted a 16.2% increase in overal revenue to £72.m and a 57% rise in profit before tax to £23m.
But Budden’s statement caused confidence in the profitability of the group to falter, driving down the share price by 10.4% yesterday. At the time of writing, the share price had lost more than 2% dropping to 257.3p.