OnTheMarket sees Brexit woes hit progress as half-year losses widen
The property site reported pre-tax losses of £7.1m for the six months to July 31 against £5.7m a year earlier.
Property site OnTheMarket has seen half-year losses widen, and said woes in the sector caused by Brexit uncertainty are “undoubtedly” taking their toll.
The group reported pre-tax losses of £7.1 million for the six months to July 31, against £5.7 million a year earlier, but revenues lifted 14% to £8 million.
However, since the first half, it has seen tough housing market conditions hold back progress in signing up estate agents to long-term paying contracts – leading to a surprise warning over results last month.
The challenging backdrop of relatively weak and highly uncertain market conditions for agents has undoubtedly slowed our progress Ian Springett, OnTheMarket
OnTheMarket said it has now introduced lower-cost, shorter paying contracts, which are proving more appealing to under-pressure estate agents.
The flow of homes coming on to the market in September was at its weakest level in three years, according to the latest figures on Thursday from the Royal Institution of Chartered Surveyors (Rics).
Rics found the number of new inquiries from buyers and agreed sales is also falling back, while prices remain flat generally across the UK.
OnTheMarket chief executive Ian Springett said: “The challenging backdrop of relatively weak and highly uncertain market conditions for agents has undoubtedly slowed our progress.”
He told the PA news agency that Brexit was the main culprit for the property market woes.
Mr Springett said: “I can’t help but think it’s Brexit related.
“Therefore the key to getting moving again is a resolution, whichever way that pans out, so people have a bit more certainty.”
OnTheMarket has been seeking to switch agents on free trial membership to paying contracts, but hit a stumbling block amid the current subdued property market conditions.
Estate agents have been reporting fewer property sales, lower letting fee income and a “wait-and-see” approach among sellers and buyers.
Last month, OnTheMarket said revenues would be lower than expected over the next two years as a result of the market pressures impeding its progress.
OnTheMarket said it had signed up 1,308 estate agency branches on new paying contracts by the end of July, which had increased to 2,346 by the end of September.
It said the rate of sign-ups had accelerated since introducing shorter and lower-cost contracts, though this will have a knock-on effect on forecasted revenues.
The group had 12,622 agent offices listed on its books at the end of September, reflecting the recruitment of new agents, although this was partly offset by the removal of agent branches following the end of free trial periods.