The firm maintained a £450,000 operating profit, down from £614,000 in the same period last year, and made a £1.6m contribution to the finances of parent company Foxtons.
However, it noted that market share based on UK Finance lending figures had risen during the period.
June was the worst month for the mortgage adviser with commissions almost half the level of the same month in 2019, after holding up well in April and May, but this measure has now rebounded to near normal for July.
The firm said it had been relying on remortgage business to see it through the lockdown period, with refinancing up 10 per cent.
“Mortgage broking performance held up well during the period, supported by a 10 per cent increase in remortgages which partially offset the decline in new mortgages,” the interim report said.
“The majority of new mortgage revenues in April and May were supported by transactions that commenced prior to the lockdown.
“Commissions in June were impacted by the temporary suspension of new mortgage underwriting during the lockdown period,” it added.
The firm noted that while remortgaging had helped secure it during the lockdown, these deals typically attracted a lower fee.
And it added that the increased uncertainty and complexity increased the importance of professional mortgage advice and supported its revenue forecasts for the second half of the year.
Increased market share
Alexander Hall managing director Dominic Scott said: “I’m very pleased with how Alexander Hall has pulled together internally and strengthened relationships with lenders and third parties during the lockdown.
“It is a testament to our company values of hard work, integrity and collaboration.
“Our people have also adapted extremely well to the temporary remote working set up and increased our market share by 23 per cent, based on UK Finance gross lending data to June 2020 compared to the same period last year.”
Scott added that the firm continued to be profitable and was planning to grow its business in parallel with the increasing demand for mortgage advice.
Sales business hit hard
Overall, the Foxtons business saw its pre-tax loss rise sharply to £4.3m from £2.5m in the same period of 2019, with group revenue down 22 per cent to £40.4m.
The estate agent’s sales business suffered most with revenue down 28 per cent, driven solely by the loss of transactions from the market, with operating loss increasing to £4.8m from £3.5m last year.
Strong demand at the beginning of 2020 was impacted by the closure of the property market during April and May, the firm noted.
It added that the sales commission pipeline was now in line with last year and so revenue performance was expected to continue improving.
Perhaps somewhat encouragingly for the wider property market, the agent noted that its average sales price had risen just over two per cent to £556,000 from £544,000 in the same period last year.
Meanwhile the lettings business saw transaction volumes drop 14 per cent and revenue per transaction drop eight per cent, causing a 21 per cent fall in revenue.
However, it managed to maintain its profitability of almost £2m from the same period last year and noted that revenues in July were only down three per cent on last year.
It added that strong stock levels meant it was well placed for the peak lettings season but demand from overseas students and corporate relocations remained uncertain.
To help mitigate the impact of the coronavirus the group furloughed around 750 employees and enacted a 20 per cent voluntary salary reduction for remaining staff
It currently has more than 85 per cent of employees at work, with usage of the government furlough scheme being gradually phased out.
Cautious about future
“The group has so far been able to weather the severe disruption to trading caused by the lockdown,” said chief executive officer Nic Budden.
“We are pleased with the way the business and, in particular, our employees have dealt with the difficult conditions of the last few months.
“Their expertise and dedication combined with our long-term investments in technology and strong financial position mean we are well-placed for the future.
“We remain cautious about the impact Covid-19 will have on the London residential sales and lettings markets in the months to come, but we are well-prepared both to deal with any further Covid-19 restrictions should they arise and also to capitalise on any market recovery.”
