LSL set to make 12m further provision for valuation claims
Mon 07 Oct 2013
The fall-out from the last property boom has returned as an unwanted guest to LSLs accounts. This year, it
expects to make a provision of some 12m in Professional Indemnity insurance costs because of possible claims
relating to over-optimistic property valuations between 2004 and 2008.
In an interim statement covering the four months to the end of October, LSL parent company of Reeds Rains and
Your Move says that new claims have not decreased as expected, and that claims are for more money.
In June 2012, it made an additional PI provision of 17.3m, saying that this was its best estimate. Its extra
provision is also described as its best estimate of likely claims costs, but LSL warns that a further provision could
still be required.
The costs associated to do with valuation claims are the only spots of rain on LSLs parade. In its management
statement, LSL says it has traded in line with expectations. It says trading momentum is now building on a month
by month basis, and that investment has been made to build capacity in the improving estate agency and
surveying markets. Total estate agency income is up 13% year on year, while lettings income has grown 6%.
Headcount in agency branches has increased by 179 since July, while its London brand of Marsh & Parsons has
opened three new branches in 2013.
LSL says it expects that the market will continue to grow next year, following the launch of Help to Buy.