Foxtons Falls Most Since IPO as CEO Warns London SlowingPatrick Gower
Foxtons Plc, a property broker focused on London and southeast England, declined the most since it first sold shares to the public after Chief Executive Officer Nic Budden said the U.K. capital’s property market may be facing a slowdown in the second half.
Foxtons declined 10 percent in London, the most since its initial public offering on Sept. 20. The shares have fallen about 20 percent this year, giving the London-based company a market value of 745 million pounds ($1.2 billion).
“We expect the growth in transaction volumes to slow from the rapid rate seen in the first half,” Budden said in a statement today. “The policy initiatives introduced in 2014 aimed at controlling mortgage lending, together with the expectation of increases in interest rates, are now having an impact on short-term demand among buyers.”
Growth in London home prices is slowing after the Bank of England and a U.K. financial regulator introduced tougher affordability checks and stress tests to curb lending and borrowing excesses. Prices will gain 15 percent this year, slow to 5 percent in 2015 and likely not grow in 2016, London-based broker Savills Plc said in an e-mailed statement yesterday.
Foxtons said five new branches opened in the first half, bringing the total to 49, and two more are scheduled to open in the second half. Pretax profit for the six months through June climbed 57 percent to 23.1 million pounds, according to the company’s statement.