Foxtons (FOXT.L) said on Thursday that lettings had been affected by fewer high value short-term lets and a significant reduction in the number of overseas student tenants and corporate relocations due to the coronavirus pandemic.
The London-based estate agent said in a trading update that average revenue per tenancy was lower in the third quarter of the year with lettings revenue down 8% to £19.5m ($25.3m).
However, business activity “significantly increased” with valuations, instructions, applicant numbers and viewings all up on last year across both lettings and sales, according to the company.
Revenue across lettings and sales was down 10% to £28.5m, compared with the same period last year.
Over the first nine months of 2020 revenue was £68.9m, down 18% on the year before, as the coronavirus pandemic hit the property market.
Sales activity increased in the third quarter, driven by pent-up post-lockdown demand and homebuyers keen to take advantage of the government’s stamp duty holiday on properties under £500,000 in place until 31 March.
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However, transactions are taking longer to move through to exchange and the market is also experiencing higher than normal transaction fall-through rates due to COVID-19-related economic uncertainty, Foxtons noted.
The company said it had returned to full capacity by the end of September, with no use of the government’s Coronavirus Job Retention scheme in October.
Nic Budden, Foxtons CEO, said: “Foxtons has made good progress in the third quarter, during which we were able to capitalise on increased levels of market activity, driven by the decision to build back capacity soon after the lockdown ended.
“We have successfully rebuilt the sales commission pipeline to its highest level in three years, delivered a resilient lettings performance and progressed our lettings book acquisition strategy.
“Although the London residential market has gained momentum, we remain cautious as economic uncertainty causes more sales transactions to fall through and is putting downward pressure on rents.”