Estate agent Foxtons blamed the upcoming election for sales of central London property drying up towards the end of last year, but news of a special dividend sent its shares surging.
Foxtons said that political uncertainty surrounding May's general election, including the prospect of a mansion tax under a Labour government, is putting off those looking to snap up expensive central London property from doing deals.
As a result the agent, renowned for its aggressive sales tactics and coloured Minis, flagged up underlying profits of £46 million for the full year, shy of City hopes for £47.5 million.
In the final three months of last year, sales commissions plummeted 25.7% against a much stronger market a year earlier, as worries over a potential interest rate rise and tougher mortgage lending conditions also took their toll.
Although the Chancellor’s stamp duty reforms will help Foxtons’ branches outside the centre of the capital, it added: “We do not anticipate a recovery in sales volumes until after the general election in May.”
But news of the final and special dividend payment of £14.5 million sent the shares up 10p to 171p, or 6%, albeit well below its 230p float price in 2013.
Foxtons said it remains highly profitable and is sticking with its plan to open five to ten new branches per year.
Housebuilder Crest Nicholson meanwhile said it was “encouraged” by the start to its new year after a 34% rise in pre-tax profit to £116.7 million in the year to October.
The firm is upping dividend payouts in response to strong cash generation.
