IPO Eye Q3 2013

Insights: The housing market

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Housing market signals better growth expectations

This quarter we saw estate agents Foxtons successfully IPO on London’s Premium segment, joining other property companies Crest Nicholson and Countrywide who had successful IPOs earlier this year. Similar to Crest and Countrywide, Foxtons priced at the top of its range and, as of the end of September, all three companies are trading well above their listing price.

It is telling that all these businesses are focused on the housing market in south-east England. Whilst the market has slowed slightly during the recession, this region has seen nowhere near the stagnancy experienced in other parts of the country.

This quarter we saw the estate agents Foxtons successfully IPO on London’s Premium segment.

Are there more to come? We know of a couple of other property related businesses in advanced discussion over capital raising options, and we believe that, particularly given the success of this year’s crop, the market would still be receptive to other strong businesses in the sector.

It also helps that the Government has a clear focus on increasing the UK’s housing stock and has introduced the Help to Buy scheme to support first time buyers. However, some see these kinds of initiatives as artificially inflating the market and think they may not produce long-term, sustainable recovery.