Foxtons banishes mansion tax jitters with push into suburbs

The Foxtons’ Minis are roaring into the London suburbs, helping the estate agent put the pre-election uncertainty that gripped the capital’s market behind it.

The agent’s shares have lost more than 40% in the past six months, sending them below the 230p float price in September 2013.

But they perked up 2%, or 3.75p, to 168.25p on Wednesday after a “particularly encouraging” second half.

Like the rest of the industry Foxtons was hit by pre-election jitters, namely the threat of a Labour mansion tax.

But the second-half rally put group sales up 4% to £150 million, despite London sales transaction levels around 11% below the previous year.

As the Zone 1 market remains tough, Foxtons has been pushing into Zone 2 and the suburbs where business is stronger.

Its Brixton branch was trashed by anti-gentrification protesters last April but it has also opened in areas like Bromley and Croydon. Since the float 15 of 16 new openings have been outside Zone 1.

Broker Numis said: “We think this expansion into the outer London zones will progressively position the group to areas where volumes are currently more robust.”

Its lettings and mortgage-broking arms are also doing well. Underlying profits this year will be in line with 2014’s £46.2 million, signalling a much better second half after the first-half profits of £20.5 million.

After another special dividend the total payment is up 13.4% to 11p, or more than £30 million in cash terms.