Foxtons set to raise £55m with stock market float
Prolonged slump in housing market has led to a rise in estate agent closures but Foxtons bucks the trend
THE London-based estate agents Foxtons, which started life as a two-man operation back in 1981, has announced plans to list itself on the stock exchange. The move underscores the gulf between the buoyant London property market and weak sales in much of the rest of the country.
Foxtons is expected to be valued at between £400 million and £500 million when it goes public next month. Its top bosses, who have a 20 per cent stake in the business, could pocket as much as £100m. The company's announcement comes as a new report shows that the number of estate agent insolvencies in the UK has rocketed by 57 per cent over the past year.
Although the UK's housing market has seen a slight upturn in recent months, it has not been sufficient to counteract the damage done by the prolonged slump in property sales since the start of the financial crisis. A report published by accountants Wilkins Kennedy found that in the 12 months to June, 77 estate agents went into liquidation, compared with 49 a year earlier.
The BBC reports that from its peak in December 2006, until the depths of the recession in December 2008, property sales fell by 60 per cent. They have barely recovered in the last four-and-a-half years.
Anthony Cork, a partner at Wilkins Kennedy, said the rise of property websites such as Zoopla and Rightmove, as well as the new breed of "quick sale companies", have also contributed to estate agents' troubles.
However, the Wilkins Kennedy findings show that significantly fewer agents went bust in Greater London, reflecting the considerably more resilient market in the capital. Cork said competition for properties within the M25 remains fierce. "Transactions are constantly being made," he said, "which isn't the picture elsewhere in the country."
Foxtons, which has 40 branches across London and two in the South East, hopes its stock market flotation will raise £55 million and leave it debt-free, reports The Times. The estate agent was bought for £375m by private equity firm BC Partners at the height of the property boom in 2007 but had to be bailed out by lenders three years later after the housing market crashed. The equity firm regained control of Foxtons last year. ·