Winkworth confident despite mini-budget speedbump

Estate agency franchisor M Winkworth said in a trading update on Tuesday that market conditions remained “strong” in the third quarter, with network sales up 38% year-on-year.

The AIM-traded firm put that performance down to both an overhang of uncompleted transactions from the second quarter, and “still strong” levels of demand.

Lettings were ahead 13% over the same period, with London rentals continuing to be driven by higher prices, rather than a significant increase in new mandates.

After the announcement of the ‘mini budget’ at the end of September, which led to a sharp rise in the cost of borrowing, new buying registrations fell significantly, Winkworth said.

Sales already underway, however, continued to progress, with a limited number of fall-throughs, with results for October described as “good”.

With the steps taken by the government to reverse most of the measures from the mini budget, the firm said it expected to see mortgage rates continuing to moderate, and sales demand rebounding in November before entering the “traditionally quiet” Christmas period.

Rental demand remained strong, with a shortage of available properties continuing to underpin the market.

The company said it had a healthy pipeline of three new offices due to come on board over the coming 12 months.

As a result of the “buoyant” level of activity in the second half, Winkworth said its full-year revenues were expected to exceed management forecasts, with its full year pre-tax profits to be ahead of the current market forecast of £2.1m.

“Winkworth has performed well in 2022 - a year that has been marked by both political and economic uncertainty but, ultimately, benefited from strong levels of UK employment,” said chief executive officer Dominic Agace.

“While higher mortgage rates are leading the consensus to point to a weaker property market in 2023, we believe that our performance next year will be underpinned by the unfulfilled needs of homeowners to move, renewed interest in London property from international buyers and rising prices in the rentals market.”

At 1446 GMT, shares in M Winkworth were up 4.76% at 165p.

Reporting by Josh White for Sharecast.com.