Countrywide Falls to Lowest Since 2013 as Housing Market Weakens

Countrywide Plc, the U.K.’s largest real estate broker, fell to the lowest since the company’s initial public offering in 2013 as the Brexit vote and an increase in sales tax damped demand for homes.

Earnings before interest, depreciation, taxes and amortization this year will be at the lower end of market expectations, the broker said in a statement on Thursday. The shares fell as much as 14 percent to 165.9 pence in London trading, the lowest since March 2013. They were trading at 168 pence at 8:25 a.m.

Home prices in the U.K. capital fell for a fifth month in August, the worst streak since 2009, amid concern that the referendum result will hurt the economy. Demand from landlords has fallen after the stamp duty tax for investors was increased by 3 percentage points this year. Real estate agents also fell on Wednesday after the U.K. government said it will ban brokers from charging fees to tenants.

“We now expect transaction volumes for 2016 to be 6 percent down on 2015 and while too early to say definitively, it is likely that the level of market transactions in 2017 will be lower,” the London-based firm said in the statement.

The pipeline of sales in London at the end of the third quarter was 26 percent lower than a year earlier, Countrywide said. Landlord demand has fallen 60 percent in the U.K. capital year-on-year, according to data compiled by broker Haart.

Sales volumes have also fallen because of a “continued gulf between buyers and sellers pricing expectations following the stamp duty changes of December 2014 and April 2016,” Jefferies Group LLC analysts Anthony Codling and Sam Cullen wrote in a note to clients. “We expect EBITDA to fall 25 percent in 2016” at Countrywide.