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Foxtons Reports £3m Revenue Impact from Renters’ Rights Act

London estate agency Foxtons has reported a £3 million revenue reversal following the introduction of the Renters’ Rights Act. The agency experienced increased tenancy terminations in May and June, particularly in the student rental sector.

Foxtons stated that the change resulted in “the reversal of approximately £3 million of previously recognised revenue that had been contractually due.” The company’s share price initially declined after the announcement, before recovering some of the losses.

The trading update, issued ahead of Foxtons’ half-year results announcement on 30 July 2026, noted short-term volatility in the lettings market as it transitions to the new legislative framework. Despite these challenges, Foxtons indicated that the Renters’ Rights Act could create growth opportunities in the medium term by increasing demand for professional lettings and property management services.

Sales Market and Cost Reductions

Foxtons also reported that the sales market has become more challenging due to domestic political uncertainty, conflict in the Middle East, and higher-than-expected interest rates. These factors have led to lower transaction volumes. In response, Foxtons has implemented operational and organisational changes to align its sales business with current market conditions, with further adjustments under consideration.

The company delivered £4.5 million of annualised cost savings in the first half of the year. This included £3 million from a cost-reduction programme addressing sales market headwinds and £1.5 million from relocating its headquarters in January 2026. These measures have largely offset increases in National Insurance and other inflationary pressures.

Financial Outlook

Foxtons expects to report half-year 2026 adjusted operating profit of approximately £8.5 million, down from £12.3 million in the same period last year. The full-year 2026 adjusted operating profit is forecast to be between £17 million and £19 million.

The trading update highlights the immediate financial impact of the Renters’ Rights Act on agencies with significant exposure to student lettings and fixed-term tenancy agreements. The revenue reversal underscores how legislative changes can affect agencies that had recognised future rental income under previous contractual arrangements.