Countrywide delivers profit warning amid muted housing market

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The UK’s biggest estate agent has hit investors with a profit warning as the post-election bounce in the housing market fell flat.

Countrywide blamed sellers for sitting on their hands — leaving a shortage of homes for sale — despite a “generally encouraging” economy, echoing recent warnings from rival Foxtons.

Stamp duty reforms last year have failed to spur the lower end of the market while sapping sales of £2 million-plus homes, it added.

Shares slumped 36p or 8% to 429p as the company warned that profits for the full year would come in below 2014’s record £121 million, disappointing City hopes of £124 million.

The slow pace of recovery means sales are likely to be at least 5% below the 2014 level — around 950,000.

However, chief executive Alison Platt said that the country’s economic backdrop points “to modest transaction growth in 2016”.

Finance director Jim Clarke said: “The disappointing thing is that the post-election bounce didn’t really materialise.”

In London, sales of homes above £2 million are down “significantly”, he added.

Countrywide is holding the dividend despite the weakness and could sell its £40 million stake in property website Zoopla.

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November 4, 2015 |
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