Foxtons Share Price And The Housing Market - Merged

[GreenDevil]

1 hour ago, TheCountOfNowhere said:

I see their share price has had a massive bounce, crica 116 today.

Anyone any thoughts on that ?

has the "recovery" begun ?

Nothing in spiv-don makes any sense anymore.

 

Perhaps they are expecting the latest housing market stimulus in the autumn statement. Some more props to tempt the last foolish plebs into 30 year debt slavery. After all some new props are a dead cert.

Propertdee can only ever go up up. At these crazy levels it makes more sense to rent. 

[AvoidDebt]

Take a look.... 

 

Foxtons Group PLC

FOXT (LON)

 

 

110.00GBX12.75 (10.39%)

Nov 23, 8:33 AM GMT - 

[zugzwang]

On 15/11/2016 at 11:13 AM, GreenDevil said:

Perhaps they are expecting the latest housing market stimulus in the autumn statement. Some more props to tempt the last foolish plebs into 30 year debt slavery. After all some new props are a dead cert.

Propertdee can only ever go up up. At these crazy levels it makes more sense to rent. 

Quote

An extra £1.4bn will be spent on delivering an 40,000 affordable homes, with the Government also expected to announce plans to enable renters to buy their own homes.

http://www.telegraph.co.uk/business/2016/11/23/autumn-statement-2016-live-pound-skids-back-towards-124-hammond/

[adamLancs]

My spider senses are telling me not to touch estate agent shares, I feel the game is up for some of them. The internet-based agents are growing too quickly and house-sale momentum cannot help them now. Rightmove will get hit eventually too, although they still have some monopoly value.

Doesn't necessarily mean house prices are going down with them, just that if they are failing to profit in these conditions then it's over when the market dries out.

[mattyboy1973]

5 minutes ago, adamLancs said:

My spider senses are telling me not to touch estate agent shares, I feel the game is up for some of them. The internet-based agents are growing too quickly and house-sale momentum cannot help them now. Rightmove will get hit eventually too, although they still have some monopoly value.

Doesn't necessarily mean house prices are going down with them, just that if they are failing to profit in these conditions then it's over when the market dries out.

The best hope for EAs now is a huge number of forced sales, but that's not happening until interest rates go up.

[Blod]

This is going to be an interesting day for Foxtons.

Still can't see how they get 40,000 new homes from only 1.4 billion, unless they're pricing in a massive crash.

[LondonBound]

If EAs lose one of their remaining profit centres, they are going to be under pressure to make more sales happen to help make up the lost revenues. 

And the only way they are going to drive volumes in this market is by pushing sellers to "be more realistic/cut asking prices...

Further preasure on house prices :-)

[Democorruptcy]

1 hour ago, AvoidDebt said:

Take a look.... 

 

Foxtons Group PLC

FOXT (LON)

 

 

110.00GBX12.75 (10.39%)

Nov 23, 8:33 AM GMT - 

Earlier in the thread it was mentioned the huge amount of money they now made from letting. The rumours about letting agent fees being banned won't be good news for them.

[moneyscam]

33 minutes ago, LondonBound said:

If EAs lose one of their remaining profit centres, they are going to be under pressure to make more sales happen to help make up the lost revenues. 

And the only way they are going to drive volumes in this market is by pushing sellers to "be more realistic/cut asking prices...

Further preasure on house prices :-)

Whilst what you say is logical, I think the more immediate impact will be that many EA's will simply go out of business and the same number of properties will be shared amongst fewer EA's.

[darkmarket]

I wondered just how much of total revenue this stream represents.

"Fees from lettings, which are mostly earned from landlords rather than tenants, accounted for 47 percent of Foxtons’ first-half revenue of 68.8 million pounds ($85.2 million), according to a July earnings statement."

https://www.bloomberg.com/news/articles/2016-11-23/foxtons-plunges-most-since-july-as-u-k-to-scrap-letting-fees

[darkmarket]

7 minutes ago, fru-gal said:

The thing is landlords can shop around, they don't need to give their business to a specific agent if the costs are too high, they can just go elsewhere or haggle.

Agreed, that pressure on EAs probably explains why rents in Scotland didn't increase.

I'm still not clear why they chose to introduce this, apart from winning votes from renters. Could be part of the logic was more renters will move more frequently. That increased demand for new rentals may be expected to push rents higher in the long term and so improve yields in the wider market. But that didn't happen in Scotland either.

All I can see at the moment is a gift to renters worth the hit to the exchequer in terms of EA corporate tax, but I suspect there's more to it than that.

[darkmarket]

To add, 47% is a huge hit to their total revenue and today's drops in share price don't come close to factoring that in.

[Confusion of VIs]

1 minute ago, darkmarket said:

Agreed, that pressure on EAs probably explains why rents in Scotland didn't increase.

I'm still not clear why they chose to introduce this, apart from winning votes from renters. Could be part of the logic was more renters will move more frequently. That increased demand for new rentals may be expected to push rents higher in the long term and so improve yields in the wider market. But that didn't happen in Scotland either.

All I can see at the moment is a gift to renters worth the hit to the exchequer in terms of EA corporate tax, but I suspect there's more to it than that.

Perhaps part of the thinking was, it reduces the cost of moving so should make the market more price sensitive. A sensible move if LLs really are putting up rents in preparation for C24 coming into effect.

[Blod]

2 minutes ago, darkmarket said:

To add, 47% is a huge hit to their total revenue and today's drops in share price don't come close to factoring that in.

They won't totally lose that but it will be reduced as its only LLs that can and will demand better prices. They'll now be an actual market in fees rather than the captured one represented by forcing tenants to pay.

[darkmarket]

1 minute ago, Confusion of VIs said:

Perhaps part of the thinking was, it reduces the cost of moving so should make the market more price sensitive.

That's like what I was suggesting in my second paragraph there, but even that increased sensitivity wasn't borne out in the Scottish experience. Could be economists' calculations vs real-world experience?

[darkmarket]

1 minute ago, Blod said:

They won't totally lose that but it will be reduced as its only LLs that can and will demand better prices. They'll now be an actual market in fees rather than the captured one represented by forcing tenants to pay.

Still seems like a small drop compared to the potential loss. If fees are reduced to a minimum as an efficient market should, I'd expect something like a third off total revenue and a lot more than 10% off the share price.

[Digsby]

20 minutes ago, Confusion of VIs said:

Perhaps part of the thinking was, it reduces the cost of moving so should make the market more price sensitive. A sensible move if LLs really are putting up rents in preparation for C24 coming into effect.

That's an excellent point - perhaps it's to make LLs think twice about putting rents up in response to S24, and to give tenants more bargaining power to resist it.

[darkmarket]

That's a good explanation, makes sense.

It only leaves the question of why they targeted this demographic in this way as opposed to others, but I'd think with inflation due to hit and the welfare budget beyond the ceiling, they don't have many other avenues.

In any case, I'm expecting further share price drops as this kicks in and Foxtons etc report on the impact.

[TheCountOfNowhere]

105.25GBX17.50 (14.26%)

 

That recovery was short lived.

[Ah-so]

4 hours ago, TheCountOfNowhere said:

105.25GBX17.50 (14.26%)

 

That recovery was short lived.

And

[jiltedjen]

22 hours ago, LondonBound said:

If EAs lose one of their remaining profit centres, they are going to be under pressure to make more sales happen to help make up the lost revenues. 

And the only way they are going to drive volumes in this market is by pushing sellers to "be more realistic/cut asking prices...

Further preasure on house prices :-)

my thoughts exactly. Now that landlords actually care about the fees it will act to drive the fees right down.
Soon it will be a case of 'we need to sell something, sell anything, or we will be bust at the end of the month'

at that point you know your out of a job in a few weeks unless you spell it out to kite flying sellers, wonder if the most desperate estate agents will be saying 'you need to sell before prices crash!'

This can only be a good thing, the 'just hold onto your old property and let it out' line of reasoning is very quickly becoming dead in the water.

I do feel that we are going to get a 5 year spread out HPC, but FIVE YEARS more waiting, is a bit of a kick in the teeth. I am resigned to loosing some equity when i buy at some point. But houses should not be investments, so never mind.

 

[Lambie]

Morning.

 

[TheCountOfNowhere]

2 minutes ago, Lambie said:

Morning.

 

 

The dead cat has bounced.

 

[FreeTrader]

Countrywide Plc released a trading update this morning. From the RNS:

Quote

As expected when we reported our Interim results, transactional activity in the residential property market has remained challenged. A combination of changes in stamp duty and the EU referendum in June means transaction levels are currently running significantly below 2015. Bank of England mortgage approvals in Q3 2016 were 12% below last year.  We now expect transaction volumes for 2016 to be 6% down on 2015 and while too early to say definitively, it is likely that the level of market transactions in 2017 will be lower than 2016.

The lettings market was affected by the rush to beat the changes in stamp duty at the end of Q1, resulting in a larger than usual supply of rental properties.  Stock has increased more than tenant numbers, meaning more choice for tenants slowing rental growth, with rents falling in some areas. Overall though tenant numbers have increased slightly compared to last year and we expect the slowdown in the sales market to support the growth in the size of the rental market in the medium term.

http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/CWD/13045032.html

The share price is down over 10%.

[ASBEAR]

Online EA like Purple brick quickly absorbs the benefits. I think they can kill all the other EA as they hire local people for helping the viewing only, probably paying per viewing, which is very similar business model to Uber or Deliveroo. Actually the young good looking boys and girls from EA have never been helpful for viewing, always failing to answer my detail question.

LL will automatically try more to use the online one to save the fees, like buyers and renters have been doing so from years ago. RIP EAs!