Chesterton jobs go as London housing market deteriorates

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The Independent Online

Chesterton, the upmarket estate agent, yesterday disclosed it was slashing 6 per cent of its staff in response to the downturn at the top end of the property market.

The company, whose chief executive resigned in September following a profit warning, said it planned to cut 60 jobs, having already axed 40 posts in the last three months. It also warned that the weakness of the property market meant it would book a loss during the first half of the current financial year.

While the job cuts will save the company at least £4m a year, Peter Brooks, the chairman, said it would be hard to stimulate revenues. Transaction levels in the first half would be below those of the same period in 2000.

"We were seeing a worsening of market conditions in the summer, and 11 September has made things appreciably worse, particularly in London," he said. "The real estate market is a matter of mood and feel, and the outlook is very unclear. Not even the experts know what the outlook is."

Mr Brooks declined to indicate what segments of Chesterton's market were worse hit, noting that the picture was mixed across all levels of both the residential and commercial businesses. However, the "middle price band" – £200,000 to £500,000 – was showing "reasonable activity", he said.

He also voiced skepticism that this week's unexpectedly large half-point cut in base rates, taking mortgage rates to 46-year lows, would rekindle the property boom. "I don't think people buying property are influenced by near-term rate cuts, because they know they will go back up again."

The London market has been hit by City job losses and a shortage of US buyers. Knight Frank, another estate agent, said prices had fallen by as much as 10 per cent.

The company's shares closed down 0.75p at 17.5p, dragging down those of rival upmarket estate agents such as Savills and DTZ. Chesterton's shares stood at 49p in February.

A shortlist for a replacement to the chief executive has been drawn up, and the group hoped to be in a position to make an appointment by the year-end. Michael Holmes quit the post in September.