Foxtons reported a 6 per cent drop in third quarter revenue to £45.9m as the company said early tenant terminations following the Renters’ Rights Act and higher mortgage costs weighed on lettings and sales activity.
The London-focused estate agency said lettings revenue fell 7 per cent to £31.1m in the three months to September, while sales revenue declined 5 per cent to £12m and financial services revenue dropped 7 per cent to £2.9m. Group revenue for the nine months to September was £129.6m, down 4 per cent from £135.1m a year earlier.
Results and causes
Foxtons attributed much of the lettings decline to an increase in tenants ending agreements early after the Renters’ Rights Act took effect on 1 May 2026. The company said those early terminations cost lettings earnings £2.7m in the third quarter and £5.7m across the first nine months, with the peak impact in May and June. Foxtons added that early terminations eased through the third quarter and into October and described the effect as largely non cash.
Foxtons said that the claim the Renters’ Rights Act caused the terminations is the companys own attribution, and it did not provide independent data to confirm a causal link.
Excluding the effect of early terminations, the group said year to date lettings revenue rose by £3.5m, although £2.6m of that improvement came from acquisitions completed during the period. For the nine months, lettings revenue was £85.8m, down 3 per cent; sales revenue was £35.5m, down 10 per cent; and financial services income rose 9 per cent to £8.3m.
Sales, mortgage pressure and regional expansion
Foxtons said average revenue per sales transaction fell 8 per cent as a greater share of completions took place at lower price points, which the group linked to mortgage affordability pressures in London. The company observed that regional markets were more resilient than the capital and pointed to that resilience as supporting its expansion outside London.
In September the group completed four acquisitions that extended its presence into Birmingham, Watford and Reading. Foxtons said it expects the acquisitions to deliver returns above its 20 per cent return on invested capital target, although the company noted those returns have not yet been realised.
A cost programme implemented during the year delivered £4.5m of annualised savings, the company said, including a downsizing of the sales operation in the first half.
Outlook and reaction
Foxtons maintained its full year adjusted operating profit guidance of £17m to £19m, unchanged from July. Chief executive Guy Gittins said lettings traded broadly in line with expectations and the company sees “longer term benefits from the RRA, notwithstanding some short term volatility”, according to a company statement.
Mr Gittins also urged ministers to extend the Your First Home scheme beyond new build homes and described stamp duty as a major obstacle to transactions, comments the company included in its results announcement.
While Foxtons flagged near term volatility in lettings and acknowledged pressure on sales margins, it emphasised the progress of its cost savings and regional expansion as support for the outlook. The company characterised the hit from early terminations as a discrete effect that dampened short term revenue rather than an ongoing cash burden.
Investors and market watchers will look for the next set of trading updates to see whether the easing in early terminations continues and whether regional acquisitions begin to contribute to organic growth and the targeted returns on invested capital.
