Winkworth, a leading estate agency, has reported robust performance in London’s housing market as conditions begin to normalise.
In the six months to June 30, the company experienced revenue growth that significantly outperformed the national average, bolstered by London’s resurging popularity as a living destination.
Revenue Growth Surpasses National Average
Estate agency Winkworth has experienced a notable reversal towards more normalised market conditions, reflected in their impressive revenue growth in London. In the first half of the year, the firm’s revenue surged by 20 per cent, reaching £5.1m from the previous year’s £4.3m. This performance outshone the national average, suggesting a significant recovery in the capital’s housing market.
In addition, pretax profits for Winkworth climbed by 26 per cent, amounting to £1.0m compared to just over £810,000 the previous year. The company noted that the income increase was primarily driven by a higher number of sales agreements, although the completion rate has lagged slightly due to extended conveyancing times.
Resurgence in City Living
Sales revenue across Winkworth’s operations rose by nine per cent on the previous year, with London outperforming the national average. Sales income in London saw an 11 per cent boost, a phenomenon Winkworth attributes to the resurgence in the popularity of city living, coinciding with stable property prices.
Chief Executive Dominic Agace observed, “Our first half results are aligned with our expectations, showcasing an uptick in sales and an increase in property listings.”
Impact of Interest Rates and Economic Conditions
Over recent years, the housing market faced a downturn due to rising interest rates. The Bank of England’s decision to increase the Bank Rate from near zero to 5.25 per cent over two years had a substantial impact on house prices, leading to a cautious buyer market.
Despite these challenges, the first half of the year showed signs of recovery, with positive expectations for borrowing costs contributing to a more dynamic market environment. Agace described 2024 as “very encouraging,” reflecting a more optimistic economic climate.
Increased Market Activity Post-Election
The housing market has also benefited from increased political stability following the recent general election. Agace noted a marked acceleration in sales agreements since the election in July 2024, driven by the new government’s strong majority and the anticipation of lower interest rates.
An increase in the number of sellers entering the market has stimulated buyer demand. Combined with more positive economic news, these factors have created a significantly improved market environment compared to 2023.
Dividend Announcement
Winkworth has announced a dividend of 6p per share for the first half of the year, an increase from the 5.8 per cent payout last year. This decision reflects the firm’s solid financial performance and their confidence in sustaining growth.
In summary, Winkworth’s strong revenue growth and increased market activity signify a promising recovery in London’s housing market.
Future Outlook
Dominic Agace remains hopeful that the combination of political stability and an improving economic outlook will continue to bolster the housing market. He stated, “Now that the election is behind us and a government with a strong majority is in place, the reduction in political uncertainty and the expected decline in interest rates should further invigorate the property market.”
The firm expects that the ameliorating market conditions will persist, fostering increased property transactions and a thriving housing sector in the foreseeable future.
In conclusion, Winkworth’s performance highlights a significant recovery in London’s housing market, driven by increased sales revenue and a positive economic outlook.
The firm’s optimistic future outlook, supported by political stability and anticipated lower interest rates, suggests continued growth in the coming months.
