Mortgage broker, appraiser and real estate agent LSL Property Services warned that the Bank of England’s latest rate hikes had caused a “significant” slowdown in a previously resilient mortgage market as gains for the second half of the year were “significant”. lower than previously thought.
The company, which includes real estate agent Reeds Rains, appraiser e.surv and a number of brokers, said its brokerage and appraisal division “continued to demonstrate resilience and agility” in the first half of the year.
However, the Bank of England’s decision in June to raise interest rates by half a percentage point to 5 per cent, after two consecutive quarter-point hikes each, led to a slowdown in buyer activity.
LSL said: “While the Group’s underlying first-half operating profit was broadly in line with our expectations, the recent change in mortgage market conditions will have a significant impact on second-half Group profit, which is now expected to be below our previous expectations.”
Analysts at Peel Hunt said LSL’s full-year profit could fall to £9m, less than half of the £21m previously expected.
David Stewart, CEO of LSL, said, “2LSL has made great strides over the past six months, executing important strategic projects.” Market conditions have been challenging and have recently become more difficult, impacting this year’s financial performance.
“The more challenging market conditions in the near term will not prevent us from continuing to take the necessary steps to capitalize on the identified opportunities for future growth.
“Despite the near-term challenges, the Board remains confident about the group’s medium-term prospects.”
Today, the country’s leading mortgage lender, Halifax, said the market continued to have “a degree of resilience” as house prices fell 2.4% year-on-year in July.
However, due to the time it takes to complete a purchase, there are concerns that a slowdown in brokerage and appraisal activity could negatively impact property prices.
LSL shares are down 37.6p, or 13.3%, at 244.4p.
https://www.standard.co.uk/business/reeds-rains-owner-lsl-warns-bank-of-england-interest-rate-hikes-b1099044.html The owner of Reeds Rains warns that rate hikes will finally slow the mortgage market