London-focused estate agent Foxtons on Wednesday reported a 25 per cent fall in first-quarter revenue as sales commissions almost halved in the latest slump in performance from the firm which once symbolised the capital's property boom.
Foxtons, which said revenue had dropped to £28.7m in the three months to March 31, suffered after a bumper first quarter last year in which many buyers brought forward purchases to avoid a tax hike.
The company, which floated in late 2013 shortly before the property market peak, has been warning since as early as 2014 that double-digit price rises and strong demand in London were cooling, hitting its profits.
But the firm, known for its fleet of Mini cars and coffee shop-style outlets, said it would improve profitability by targeting higher-volume and higher-value markets in the capital and maintaining a balance between sales and lettings.
Letting revenue, which remained stable at £15.5m and accounted for over half of turnover, is likely to fall as the government introduces a ban on one-off tenant fees in an attempt to bring down the cost of renting.
The fees, which go towards the cost of conducting viewings, verifying references and drawing up contracts, have become an increasingly important money-earner for the industry, averaging £337, according to independent group Citizens Advice.
The firm is set to fall back further this year, according to a Thomson Reuters poll of analysts, with pretax profit due to fall by more than 10 per cent to £16.6m, after a full-year drop of more than 50 per cent in 2016.