A top City investment consultancy has said that one leading private agency chain has cut fees to 0.5%, ahead of the upcoming EU referendum.
Despite not revealing the name of the agency, Jeffries said that it had slashed fees in order to build up instructions before the vote in June.
Bullish
Jefferies made the reference to the unknown agency following the bullish trading statement released by Countrywide yesterday.
Countrywide stated that house sales were up by 30% during the first quarter of this year. This was not unique however, with many agents reporting similar rises, as investors rushed to beat the additional stamp duty deadline on April 1st.
In both Jeffries note to investment clients and in the Countrywide statement, concerns are raised about the economic impact of the Brexit vote.
Agency cuts fees to 0.5% ahead of Brexit vote
Cuts
Anthony Codling, Jefferies’ analyst Anthony Codling noted, ‘price competition remains strong and we are aware that one of the private majors has been cutting fee rates to around 0.5% in order to firm up a pipeline ahead of the EU referendum.’[1]
Noting that Countrywides’ trading statement yesterday was shorter than in previous months, Mr Codling also said that this was a hint of falls in trade.
Codling observed, ‘we would not be surprised to learn that one of the reasons Countrywide has trimmed it’s trading update disclosures is to reduce the risks of analysts extrapolating Q1 performance across the full year. We did find the trading update somewhat brief and somewhat short on numbers, although Countrywide disclosures are in-line with their peers.’[1]
[1] https://www.estateagenttoday.co.uk/breaking-news/2016/4/major-agency-has-cut-fees-to-0-5-in-case-market-slumps–claim