Editor's note: This brief was summarised by The Property AI Team from a report by Property Industry Eye. Read the original article for full details.
Foxtons Q3 Revenue Falls 6% as Renters' Rights Act Hits Lettings
Foxtons reported a 6% fall in third-quarter revenue. The Renters' Rights Act disrupted its lettings business, and higher mortgage costs weighed 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.
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 after the Renters' Rights Act came into effect 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 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 struggled against 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 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 reduced 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 maintained market share despite operating with a smaller sales business.
The company 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, though 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.
Foxtons said it remains on course to deliver full-year adjusted operating profit of between £17m and £19m, in line with guidance issued in July.
Source: Property Industry Eye