In its half-year report, Foxtons said this was due to a decline in the sales market and higher interest rates impacting on house purchases. However, this was offset by refinance activity, as the firm saw a 29 per cent rise in this kind of business compared to last year.
Alexander Hall saw a three per cent rise in overall business volumes to 2,411 transactions, which was partially attributed to a 21 per cent increase to its adviser headcount.
Despite this, the average revenue generated per transaction fell by 15 per cent to £1,755. Foxtons put this down to a drop in new purchase volumes and a rise in product transfers, which are lower in value.
In all, revenue from the financial services arm made up six per cent of the group’s total revenue, relatively unchanged from the seven per cent contribution last year.
Going forward, Foxtons said refinance activity within Alexander Hall would “remain resilient” while purchase mortgage volumes would “track the sales market”.
Alexander Hall is expected to deliver on its aim of seven to 10 per cent revenue growth and plans to do this by increasing its adviser headcount, improving productivity and cross-selling.
Tom Davies, managing director of Alexander Hall, said: “This has been a good performance by Alexander Hall following a challenging first half of the year. We have seen a 29 per cent growth in refinancing volumes compared to H1 last year and expect volumes to remain resilient while new mortgage volumes will track the sales market. We have invested in the business, growing our adviser headcount by 21 per cent, improved productivity and enhanced our protection proposition and cross-sell.
“We remain confident that our growth plans will continue to deliver positive results.”
Davies said the firm would continue with its level of focus on the refinance market which helped it to deliver its results. He said the firm was “happy” with its headcount growth, which is set out to achieve last year, and said this would lay the foundation for continued growth in the future.
Wider business performance
The Foxtons group saw a nine per cent increase in its revenue from £65.1m last year to £70.9m this year. Its profit before tax came to £6.1m in H1, up from £4.3m. Meanwhile, its profit after tax was £4.1m, a rise from £2.9m during H1 last year.
Within its estate agency businesses, lettings revenue rose 26 per cent to £49.8m and sales revenue fell 19 per cent to £16.9m, which was due to lower exchange volumes.
Guy Gittins, group chief executive of Foxtons, said: “Our continued focus on growing non-cyclical and recurring revenues is working and has enabled us to deliver strong revenue and profit growth despite a challenging sales market and investing in recruiting more fee earners.
“Looking ahead, despite the uncertainty in the sales market, our resilient and growing lettings business combined with continuing sales market share gains and a strengthened sales culture, means we are well positioned for the rest of the year.”
