Analysts took the red pen to profit forecasts at Foxtons (FOXT) after a pessimistic update from the estate agent on London’s housing market.

Property transactions in the capital during the first six months of 2016 were substantially below the same period last year, said chief executive Nic Budden.

Speaking alongside an interim earnings update which revealed a 42% fall in pre-tax profits to £10.5 million, Budden says the market is unlikely to recover before the end of 2016.

Analysts at Numis lowered earnings before interest, tax, depreciation and amortisation (EBITDA) estimates for 2016 to £27.4 million from £30 million as a result.

Shares in Foxton's now trade 10% lower at 111.1p.

Foxtons opened five new branches in the first half of 2016, taking the total to 63.

Management warns the network may not grow as quickly in 2017 but is sticking by a longer term ambition of reaching 100 branches

Numis believes Foxtons is well positioned to benefit when the market improves.

‘Whilst it is difficult to predict the future trends in the London housing market, Foxtons remains highly cash generative and we believe it will benefit when London sales volumes do recover from the current low levels,’ its analysts said in a note.

Foxton's pessimistic assessment of London’s housing market comes a day after national estate agency Countrywide (CWD) issued a profit warning.

Issue Date: 29 Jul 2016