Winkworth is expecting more uncertainty in the lettings market amid rental reforms and tax fears, which it warns could impact supply.

A half-year update from the franchise network said its lettings and management business has been more subdued than sales but remains strong.

Dominic Agace, chief executive of Winkworth, said: “In the lettings market, we see more uncertainty as the market awaits the implementation of new legislation. We anticipate that there will be a further reduction in supply as landlords exit the market and aren’t replaced, particularly in the short term as some look to speed up their exit in anticipation of increases in capital gains tax.”

Winkworth said lettings growth slowed in the first half of the year, with network revenue up by 4% to £14.5m but applicants 3% down on last year as tenants hit “affordability ceilings.”

The agent also blamed the reversal of the move out of London to the country finally settled down, albeit with rental prices remaining at high levels. 

The update added: “Our network growth in the country markets, where there is greater affordability, meant that lettings revenue there outperformed the network average, with growth of 8%.”

A combination of a slowing of the rental market and an uptick in sales activity meant that sales to lettings revenue ratio moved from 47:53 in H1 2023 to 48:52% in H1 2024.

Network revenues overall were 6% higher annually at £27.9m and sales were up 9% to £13.4m.

Overall revenues rose 20% to £5.14m, while pre-tax profits were up 26% to £1.02m compared with the same period last year.

https://www.investegate.co.uk/announcement/rns/m-winkworth–wink/half-year-report/8409864