|Has Foxtons Priced Themselves Out of the Market?|
Estate Agency up for sale with a £400 million price tag
City pundits have baulked at the £400 million price tag put on Foxtons estate agency by its founder Jon Hunt.
The Chiswick based agency, notorious for its graffiti clad fleet of minis and regularly accused of questionable sales tactics, is thought to be only worth half of the asking price.
Industry insiders claim that the company is suffering from increasing competition and “highly optimistic growth projections” made by Foxtons in house mortgage brokers Alexander Hall and that a sale to a rival agency is “more likely” than a stock market float.
Foxtons has stated that they are on course to make their projected £25 million pre-tax profits this year despite only managing £14.2 million in 2005.
Few will miss the irony of Foxtons bullish price tag, overpricing is just one of the accusations the company regularly comes under fire for. Earlier this year the controversial agency became national news after admitting deliberately destroying rival agencies' boards and found themselves the focus of a BBC expose.
The programme also revealed how mortgage brokers Alexander Hall routinely shared information about buyers with Foxton's giving the agents inside knowledge as to how much the buyer was likely to be able to afford.
No investigation or punishments are believed to have followed the documentary because Foxton's does not belong to the Estate Agents' Ombudsman unlike more than 60% of its competitors. Although in response to the reports of the Whistleblower programme, Foxtons told the BBC, "Foxtons Limited and Alexander Hall Limited pride themselves on the professionalism and transparency of their respective businesses and has the utmost respect for the needs of its client and will always act in the client's best interest. Foxtons has in place a rigorous training process, during which its employees are told repeatedly of their statutory and contractual duties, and the high standards expected of them."
December 6, 2006