LSL Property Services sees encouraging signs in housing market

ESTATE agency group LSL, which owns the Your Move and Reeds Rains chains, will tell shareholders today that it has been trading “slightly better” than expectations.

Roger Matthews, chairman of the York-based group, which also operates financial services and surveying arms, will tell shareholders at its annual general meeting that while house sales are at an an historic low, enquiries to its estate agencies from potential homebuyers is “encouraging”.

The group saw turnover in the three months to March down 28% from a year ago with turnover in its estate agency and financial services business down 32% year-on-year and surveying turnover down 25%.

Mr Matthews said that the firm’s board remains “appropriately cautious” about the outlook for the rest of the year and continue to keep down costs and control cashflow.

“The systemic lack of liquidity in the lending market and concern around unemployment are expected to continue to suppress UK housing market activity in the short to medium term.

“As a consequence, the timing of a return to more ‘normalised’ market conditions remains uncertain. Against this background, the group continues to demonstrate an encouraging level of resilience, is well capitalised and well placed to deliver significant growth as and when market activity improves.”

Mr Matthews will tell shareholders: “We are pleased to report that, against a market backdrop that continues to be challenging, overall the group has traded slightly better than our expectations. 

“The volume of house purchase transactions continue to be at an historic low, but more recently the level of buyer enquires and activity in our estate agency business has been encouraging. The group will also benefit from a substantially reduced cost base in 2009 and the continued growth of counter-cyclical income stream businesses, such as lettings and repossessions asset management.”

LSL made a pre-tax loss of £4.8m last year compared to a profit of £22.3m in 2007 as it cut jobs as part of cost reduction measures.