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Shares in UK estate agent Countrywide (CWD) have fallen through this morning after its Q3 trading statement contained a FY profits warning attributed to less transactions since the referendum and changes to stamp duty. Although not specifically mentioned, new Chancellor Hammond’s pop at the rentals sector by banning administration fees probably hasn’t helped either. With said fees likely generating easy profits, especially in the key London market, their loss is almost certain to hit group margins.
With less sale/purchase transactions expected in the second half of the year (-6%; declines expected in 2017 too) and negative trends seen in the rental market, the outlook is not exactly fostering a bidding war. Uncertainty related to Brexit isn’t helping. The Supreme Court has yet to decide on whether a parliamentary vote is needed on trigger Article 50 and there is a lack of visibility from the government on what Brexit will actually mean. It’s understandable why so many are holding off from moving. That traditional year-end rush to ‘get in’ for Christmas is unlikely this year.
Mike van Dulken, Head of Research, 24 Nov
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