Profits collapse at Hambro Countrywide

Hambro Countrywide, the troubled estate-agency chain, admitted yesterday that the slide in the housing market had led to a profits collapse in the past year.

Harry Hill, Countrywide's managing director, said he had not expected the property recession to last so long when his firm added 300 branches to its chain last year.

"We thought we had got ourselves in a position to maximise our market share," Mr Hill said. "Since then, it has become commonly accepted that the housing market has become significantly worse. That was an assumption we did not take into account. We had also hoped the Government might take steps to underpin the market. Since then, there has been no evidence of that."

But he said predictions of massive losses were "extremely pessimistic and uninformed". Shares in Hambro, the investment bank that owns Countrywide, fell 13p to 193p.

Mr Hill's comments followed warnings yesterday by the Royal Institution of Chartered Surveyors of a "malaise in the market". The number of estate agents who believe house prices are falling was five times greater in July than in April, the estate agents' trade body said.

"Buyers and sellers alike, widely unnerved by the malaise in the market, are extremely cautious about making commitments and are waiting to see how it develops," the RICS said.

Analysts predict that Hambro's estate-agency chain will report significant year-end losses when the bank releases its interim figures next week.

In October last year, Hambro paid Nationwide Building Society pounds 1 for its 300-strong estate agency. It also bought Nationwide's profitable property surveying business for pounds 12m, in a move that made it the dominant player in the UK property market, with 760 branches.

At the time, Hambro Countrywide predicted that an end to the housing crisis would see the chain rapidly moving into profitability. It argued that group profits would be boosted further by sales of financial products through sister company Hambro Guardian.

Mr Hill said yesterday: "When we bought the estate-agency business, we did so in the hope that the market had bottomed out. That said, we are not entirely disappointed with the progress we have made thus far. I have no regrets about our decision last year. Had we known then what we know now, I would still have bought the estate-agency business from Nationwide."