Foxtons expects London's rental market to remain strong in 2023, its chief executive said on Tuesday, while property sales are set to recover in the latter part of the year.
Property sales in Britain have slowed markedly over the past six months as mortgage rates, which rose sharply after a disastrous September mini-budget, and broader economic problems dent demand for new homes and in turn fuel the rental market.
"The available lettings stock across London is actually down somewhere in the region of 35% versus the year before, but our tenant demand is up twice or even three times the volumes we have seen in the past," Foxtons CEO Guy Gittins told Reuters.
Gittins said a dramatic demand-supply imbalance led to 20% rent increases last year as the economy opened up after pandemic restrictions, but growth would normalise at around 5% in 2023.
Foxtons, which is 95% focused on London, has shifted to lettings in recent years, with 65% of its 2022 revenue coming from that part of the estate agent's business.
London's largest estate agent said it expects "a more favourable sales market" in the latter part of 2023, buoyed by an anticipated reduction in mortgage rates.
British house prices jumped unexpectedly in February, potentially reflecting improvements in consumer confidence and the mortgage market, data from lender Halifax showed.
Foxtons' adjusted operating profit from continuing operations for 2022 rose 56% to 13.9 million pounds ($16.7 million), beating market forecasts of 12.5 million pounds.
Shares in the FTSE SmallCap firm, which said it would pay a full-year dividend of 0.90 pence per share, up from 0.45 pence a year ago, were trading 2.4% higher at 42.20 pence at 0957 GMT. ($1 = 0.8307 pounds) (Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Rashmi Aich and Alexander Smith)