Foxtons, the London-based estate agency, has reported a significant downturn in its sales division, with house sale fees plummeting by 35%. This decline is largely attributed to a challenging sales market characterized by weak consumer confidence, higher-than-expected interest rates, and ongoing political uncertainty. These factors have collectively led to a decrease in transaction volumes across the property market. Foxtons specifically highlighted that many sellers are holding off on transactions due to these conditions, further impacting the company's revenue from sales commissions.
The company also encountered setbacks in its lettings market due to the new Renters' Rights Act (RRA). The abolition of fixed-term tenancy agreements and increased tenant flexibility resulted in elevated tenancy terminations, particularly among student rentals, during May and June. This led to a reversal of approximately £3 million in previously recognized revenue. Despite the short-term volatility, Foxtons anticipates that the RRA will ultimately boost demand for professional lettings and property management services in the medium term.
In response to these market pressures, Foxtons has proactively implemented cost-saving measures, achieving £4.5 million in annualised savings during the first half of the year. Approximately £3 million of these savings came from a targeted efficiency program, with additional savings from relocating the company's headquarters. However, the challenging market conditions have led Foxtons to revise its financial outlook, now expecting a full-year adjusted operating profit of between £17 million and £19 million, a reduction from the £22.2 million reported in 2025. This compares to an adjusted operating profit of approximately £8.5 million for the first half of the current year, down from £12.3 million in the previous year.
The news had an immediate negative impact on Foxtons' stock performance, with shares falling by 9.1% to 39.58 pence around midday in London. Analysts have pointed to the dual pressure from the renters' rights legislation and a subdued sales market as key drivers for the revised profit guidance and investor caution. Specifically, the RRA's impact on early tenancy terminations and the ongoing struggle to adapt to a lower transaction volume environment in sales are being closely watched.
