Countrywide profits from continued property boom

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The Independent Online

Countrywide, Britain's biggest estate agent, said yesterday that levels of business are at an all-time high as the nation's obsession with property shows no signs of abating.

The company behind the Bairstow Eves chain recorded sales of £92m, up 40 per cent, in the first four months of this year.

Countrywide, which was founded in 1985 by its chairman Christopher Sporborg, had a market capitalisation of £954m at yesterday's closing price of 543.75p.

Mr Sporborg said: "We must be doing something right." He took just 150,000 shares when the company floated, which he seemed to regret yesterday. "In those days, one did things differently," he said.

The shares have performed much more strongly than the rest of the real estate sector in the past year.

In a statement to the group's annual meeting yesterday, Countrywide said that so far this year, "the financial results of all our operating divisions have exceeded our internal expectations". The level of activity in the housing market remains hectic, it said.

Mr Sporborg said: "The problem with the housing market is that supply is outweighed by demand. For every house that comes on the market, three or four people want to buy it."

The chairman said he was "nervous" about the strong possibility of a rise in interest rates, after remarks by the Governor of the Bank of England on Wednesday. "You can stifle demand for houses by clobbering people with high rates, but I am not sure how sensible that is," Mr Sporborg said. A lot of retail expenditure is linked to people moving house, he added, and understandable attempts to cool the housing market can have a dramatic knock-on effect.

Countrywide does not expect house prices to rise much faster than inflation over the next few years. The average price of a house being sold by the estate agent is £184,000 and it said it has pipeline sales in the hands of lawyers worth £92.3m, a record for the company. Numis Securities upped its forecasts for Countrywide's 2006 profit from £83m to £93m.