Foxtons expects first-half profits to fall after the introduction of the Renters’ Rights Act triggered higher-than-expected tenancy terminations and a £3m reversal of previously recognised lettings revenue.
In a trading update ahead of its half-year results on 30 July, the estate agency group said the abolition of fixed-term tenancies under the new legislation led to elevated tenancy terminations during May and June, particularly within the student rental market.
The company said the disruption was temporary and maintained that the Renters’ Rights Act would create longer-term opportunities by increasing demand for professional lettings and property management services.
Away from lettings, Foxtons said sales trading had also become more challenging as political uncertainty, conflict in the Middle East and higher-than-expected interest rates weighed on consumer confidence and transaction volumes.
COST SAVINGS
In response, the business has already delivered £4.5m of annualised cost savings during the first half of the year, including £3m from a sales-focused cost reduction programme and £1.5m from its headquarters relocation earlier this year.
The group’s Financial Services division was the standout performer, reporting revenue growth driven by stronger remortgage activity, increased cross-selling and resilient purchase mortgage revenues.
Foxtons now expects to report adjusted operating profit of around £8.5m for the first half of 2026.
Foxtons now expects to report adjusted operating profit of around £8.5m for the first half of 2026, compared with £12.3m in the same period last year. It said the comparison was distorted by the surge in housing market activity ahead of the March 2025 stamp duty deadline.
Looking ahead, the group expects lettings to remain resilient despite this year’s transition to the new rental legislation, while warning that the sales market is likely to remain subdued against an uncertain economic backdrop.
Foxtons forecasts full-year adjusted operating profit of between £17m and £19m, with performance weighted towards the second half as tenancy termination levels normalise and the business continues to benefit from its focus on lettings and property management.
Main picture: Guy Gittens, Foxtons CEO
