2nd Feb 2017 09:55
LONDON (Alliance News) - Estate and letting agent MartinCo PLC said Thursday it does not expect a significant hit to its business from UK government intervention in the buy-to-let sector, as its revenue increased in 2016.
In a trading update, MartinCo reported its 2016 revenue increased by 15% to GBP8.2 million from GBP7.1 million in 2015. Of its management service fees, 74% were comprised of letting fees, dipping slightly from 76% in 2015.
The company reaffirmed its commitment to a progressive dividend policy, ahead of its next dividend declaration in May.
MartinCo also noted its current trading is in line with expectations. The "fundamental drivers" of expansion in the UK private rented sector remain in place said MartinCo, which highlighted there is currently no timetable for the UK government's proposal to ban or restrict letting agent fees for tenants.
MartinCo also said it does not expect UK government intervention in the buy-to-let sector will significantly impact its business. In 2016, stamp duty was raised on buy-to-let properties, while the Prudential Regulation Authority plans to enforce minimum interest coverage ratios for buy-to-let lenders, in a move likely to restrict market supply.
"Buy-to-let investors have generally reduced gearing in their portfolios over the years since 2008 and are believed to be able to absorb rising interest rates. We are well positioned to sell investment properties if investors decide to exit, and our research suggests that larger buy-to-let investors would purchase this stock," said Ian Wilson, chief executive of MartinCo.
"We remain positive about the outlook for our core lettings business, from which 74% of our franchise royalty income is derived. I look forward to providing a further update at our full year results in April," added Wilson.
MartinCo's 2016 full-year results will be released on April 5.
Shares in MartinCo were up 6.2% at 137.99 pence Thursday.
By Adam Clark; [email protected]
Copyright 2017 Alliance News Limited. All Rights Reserved.