Lettings save the bacon for agency group facing challenging market

Lettings income for LSL Property Services increased two per cent in the past year - at just the time the company admits the sales pipeline has hit a challenging patch. 

In a trading statement to shareholders the group says: “The housing market is heavily impacted by sentiment and has the potential to surprise on the upside. However, with the recent reduction in activity levels and continuing uncertainty over UK economic conditions, until we have greater clarity on the economic backdrop, we are cautious on the market outlook for 2023. 

“A significant reduction in housing transactions would clearly have a material effect on our estate agency residential sales business and our direct-to consumer financial services business. We continue to focus on proactive management of our cost base, to limit the impact of these pressures.”

The lettings side was just about the only aspect of LSL’s business - which includes financial services and surveying as well as sales and rentals - to be unaffected by current economic uncertainty and recent political turmoil in the UK.

The statement, which covers the 10 months to the end of October this year - talks of a marked slowdown in sales and related activity since the Truss-Kwarteng September mini-Budget. House sales fall-throughs are also on the rise. 

David Stewart, chief executive of LSL, comments on the post-mini Budget picture: "Since that time, market conditions have been more challenging than previously expected, with the mortgage and housing markets being disrupted by political uncertainty and sharply increasing interest rates. 

“Across the market, this has given rise to a reduction in mortgage activity and new house sales, and an increase in fall-throughs of previously agreed sales. This challenging background means that there is a wider range of potential outcomes for the full year than previously expected.”