Estate agency group Countrywide provided further evidence of a cooling in the housing market today as it warned annual results would be below current expectations.
Countrywide, which has almost 900 UK offices including the Bairstow Eves and Mann & Co chains, said the cooler market had persisted through August and seemed to be continuing into September.
Shares plunged nearly 15% after the warning, in which Countrywide said the number of transactions in its pipeline was 20% lower than last year.
The group warned last month that successive interest rate rises had had a dampening effect on the market as buyers started to act “more circumspectly”.
Managing director Harry Hill said today that although the group was taking firm action to reduce its costs, it believed results for the year would be “below current market expectations”.
The warning comes as the International Monetary Fund (IMF) warned of a possible sharp fall in UK house prices.
The IMF’s World Economic Outlook said that, based on interest rate rises priced into future markets, the market would probably slow down significantly in the next 18 months.
The Bank of England has hiked interest rates five times since last November in an attempt to cool consumer spending and soaring house prices.
Yesterday’s minutes from the monthly meeting of its Monetary Policy Committee showed that signs of a cooling housing market had influenced its decision to keep rates on hold at 4.75% this month.
References: EGi News 23/09/04
