Shares in Neil Woodford-backed online estate agent Purplebricks Group (LSE: PURP) have risen 70% this year, but investors reacted cautiously to last week’s full-year trading update.

The company said revenue rose by 445% to £18.5m, in line with analysts’ expectations. Purplebricks’ plan to recruit more agents, which it calls local property experts, is ahead of schedule. The firm now has 205 LPEs dotted around the UK.

Purplebricks’ growth is impressive. Its low-cost hybrid business model seems to have the potential to disrupt the estate agency sector. If it can expand fast enough, Purplebricks may be able to crush smaller online competitors before they develop strong brands.

Sales are expected to rise by another 150% to £49.2m next year, with a maiden profit of £8m forecast by analysts. Although impressive, this would still leave Purplebricks trading on 50 times forecast earnings.

For further share price gains to be justified, I’d suggest that Purplebricks’ forecast profits would need to rise by another 200% to 300% over the next few years. This is quite possible, but it’s certainly not a sure thing.

A cash machine for shareholders?

In the short-to-medium term, I suspect that high profile London estate agent Foxtons Group (LSE: FOXT) could be a more profitable trade for investors.

Foxtons appears to be coping with the slowdown in the London property market by focusing more heavily on the rental market, which now provides almost half of the group’s revenue. The firm’s shares have fallen by nearly 40% over the last year and are starting to look quite good value, in my view.

A forecast P/E of 12 is complemented by a potential dividend yield of 7.8%. Although I’d normally argue that such a high payout is risky, Foxtons’ free cash flow was enough to cover this payout last year. Foxtons has no debt and net cash of £25m. Profits are expected to be broadly flat this year, so the payout seems affordable.

The risk is that profit guidance will be cut during the second half of the year. There’s no way of knowing whether this is likely, but even a 30% cut to the forecast dividend would still provide an attractive 5.4% yield.

In my view, Foxtons could be a good way to profit from the continued strength in the housing market.

Is international better?

If slower economic growth is making you concerned about the outlook for the UK market, then upmarket international estate agent Savills (LSE: SVS) may be a better alternative.

Savills’ share price has fallen by 15% over the last year, but earnings per share are expected to rise by about 10% this year and by 6% in 2017. The stock currently trades on a forecast P/E of 12, falling to 11.2 in 2017.

Free cash flow is very strong and Savills has a price/free cash flow ratio of 10.4, based on last year’s results. That’s very attractive, as it shows that the firm’s accounting profits are backed by genuine surplus cash.

The stock’s  valuation is also underpinned by net cash of £151m. Overall, Savills’ forecast dividend yield of 3.8% looks very safe to me, and could even rise further.

I believe that Savills and Foxtons could both be profitable plays on the UK property market. But their ultimate growth potential may be limited.

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Roland Head has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.