Foxtons has reported a 6% fall in third-quarter revenue after the Renters' Rights Act disrupted its lettings business and higher mortgage costs continued to weigh on property sales. The London-listed estate agency group generated £45.9m in revenue during the three months to September, down from £49m a year earlier.
Lettings revenue fell 7% to £31.1m, while sales revenue declined 5% to £12m. Financial services revenue also dropped 7% to £2.9m. The figures highlight the pressure facing one of London's largest estate agency groups, despite its continued expansion through acquisitions.
Renters' Rights Act triggers £5.7m revenue hit
Foxtons attributed much of the decline in lettings revenue to an increase in tenants ending their agreements early following the introduction of the Renters' Rights Act on 1 May. The company reported a £2.7m revenue impact from elevated tenant-led early terminations during the third quarter. Across the first nine months of 2026, the impact reached £5.7m, with the highest level of terminations occurring in May and June.
Foxtons said early terminations eased throughout the third quarter and into October, suggesting the disruption may be temporary. The company also stressed that the financial impact was largely non-cash. Excluding the impact of early terminations, year-to-date lettings revenue increased by £3.5m. However, £2.6m of that increase came from acquisitions rather than existing operations.
Growth in build-to-rent and additional property management services also supported revenue. Despite those gains, total lettings revenue for the first nine months fell 3% to £85.8m.
Sales revenue drops 10% as buyers retreat
Foxtons' sales business continued to struggle against a backdrop of higher mortgage rates and weaker buyer confidence. Third-quarter sales revenue fell 5% to £12m. Although like-for-like transaction volumes remained broadly stable, average revenue per sale declined 8%. Foxtons attributed the fall to a greater proportion of lower-value property transactions as mortgage affordability constrained buyers at higher price points.
The picture was weaker across the first nine months. Sales revenue fell 10% to £35.5m, despite a £1.1m contribution from acquisitions. The company said economic uncertainty, geopolitical tensions and higher borrowing costs had weighed heavily on buyer activity in London. Regional markets proved more resilient, reinforcing its decision to expand beyond the capital.
Foxtons cuts costs and targets further acquisitions
Foxtons has continued to reduce costs while expanding its lettings portfolio through acquisitions. The group said its cost reduction programme delivered £4.5m in annualised savings. This included downsizing its sales operation during the first half of the year. Foxtons said it maintained market share despite operating with a smaller sales business.
The company also completed four acquisitions in September, expanding its operations in Birmingham, Watford and Reading. It expects the deals to deliver returns above its 20% return-on-invested-capital target, although those returns have yet to materialise. Foxtons said it has identified further lettings acquisition opportunities.
The group is increasingly relying on recurring property management income and acquisitions to offset weakness in residential sales.
Mortgage business also feels the squeeze
Foxtons' financial services division reported a 7% decline in third-quarter revenue to £2.9m. The company blamed smaller average mortgage sizes, which reduced the revenue earned per transaction. However, revenue for the first nine months increased 9% to £8.3m. Foxtons attributed the improvement to refinancing activity and increased sales of additional financial products.
Overall group revenue for the first nine months fell 4% to £129.6m, compared with £135.1m in 2025.
Gittins sees longer-term benefits from rental reforms
Guy Gittins, chief executive of Foxtons, said the business was adjusting to the Renters' Rights Act. "Lettings traded broadly in line with our expectations, with the initial disruption following the introduction of the Renters' Rights Act moderating through the quarter and re-letting activity remaining robust," he said. "We continue to see longer-term benefits from the RRA, notwithstanding some short-term volatility."
Gittins also called for the government's Your First Home scheme to extend beyond new-build properties. "First-time buyers deserve real choice, and extending a modified version to pre-owned homes would help free up the wider market and avoid the price inflation seen under Help to Buy," he said. He argued that stamp duty remained a major obstacle to housing transactions.
Foxtons is maintaining its full-year profit guidance despite falling revenue across all three divisions in the latest quarter. However, with sales revenue down 10% year-to-date and acquisitions accounting for much of the underlying lettings growth, the group faces continued pressure to improve performance across its existing business.
