July 27 (Reuters) - Countrywide Plc shares plummeted to a record low after the property services group reported a 98 percent fall in first-half profit as demand was tempered by a higher property tax, and uncertainty following the general election and the Brexit vote. Estate agents have continued to smart from the slowdown in the secondary housing market that accounts for nearly 90 percent of transactions, though strong demand from first-time buyers has helped most builders recover from the initial dip after the UK’s June 23 vote to leave the European Union. “The first half of 2017 was tough for the group compared to the same period last year, given the high levels of housing transactions brought forward in time as a result of the stamp duty changes and the EU referendum,” Chief Executive Alison Platt said. This has forced property dealers, including Countrywide, to invest in digital expansion, close branches and slash headcount to stave off the growing threat from online agencies that lure customers by charging lower fees. Countrywide, which set out plans to cut costs in March, said total savings rose to about 19 million pounds. The company said it was working on plans to mitigate the impact of the removal of tenant fees — expected in 2018 — and focus on further digital penetration, besides reducing IT running costs. Smaller rival Foxtons Group Plc also posted a 63.8 percent fall in first-half profit, hurt by slowing demand and increased political uncertainty. UBS analysts said Countrywide’s results were “further evidence of the structural challenges that Countrywide face,” and said it expects further weakness. Pretax profit fell to 447,000 pounds ($587,402.70) in the six months to June 30, from 24.3 million pounds a year earlier. However, the company - Britain’s largest estate agency by revenue - said it expect full-year results to be within the range of market expectations. Countrywide stock was down 10.8 percent at 146.5 pence, while Foxtons’ shares were down 5 percent at 90.84 pence at 0937 GMT. $1 = 0.7610 pounds Reporting by Arathy S Nair in Bengaluru; Editing by Sunil Nair
UK estate agency Countrywide has its profits drop by 98% YoY in H1 2017, pushing its shares to a record low. The company said it had lost £2.3bn on residential mortgages and other loans during the first half of 2017. The secondary housing market has borne the brunt of the political instability, with increasing pressure from digital agencies that encourage customers to join with lower fees.