London estate agency Foxtons has outlined plans to expand its lettings business by targeting landlords seeking compliance support under the new Renters’ Rights Act, whilst positioning itself to acquire smaller competitors struggling with increased regulatory demands.
Chief Executive Guy Gittins stated that the legislation creates “significant growth opportunities” for the group, as landlords face stricter compliance requirements and potential fines or rental repayment orders.
Lettings revenue supports flat profits
The strategy follows Foxtons’ 2025 financial results, which showed group revenue up 5% to £172.5 million, whilst operating profit remained largely flat at £22.2 million, compared to £22.1 million the previous year. The lettings division provided stability against volatility in the sales market.
“Recurring lettings revenues enabled us to maintain adjusted operating profit despite a volatile sales market,” Gittins said in the company’s annual report.
Self-managing landlords in focus
Foxtons estimates that more than half of landlords currently self-manage their properties, representing what the company describes as an expanded addressable market as regulatory complexity increases.
“The legislation increases the importance of working with a professional, high-quality agent who can ensure compliance and protect landlords from the risk of fines or rental repayment orders,” Gittins explained.
The company anticipates increased uptake of property management and ancillary services, which carry higher margins than standard lettings fees.
Consolidation expected
Gittins suggested that smaller independent agents would face “significant pressure” due to rising investment requirements in compliance systems and personnel, potentially accelerating sector consolidation.
“This is expected to accelerate sector consolidation and presents market share opportunities for Foxtons by leveraging our brand strength and operational capabilities,” he stated.
In January, Foxtons acquired Birmingham lettings agency FleetMilne for £3.2 million, marking its first expansion outside the South East. The move signals the company’s intent to pursue acquisitions as part of its growth strategy.
The regulatory environment continues to reshape the lettings sector, with industry participants facing various operational pressures. Meanwhile, broader market uncertainty has prompted some property companies to reassess their investment strategies amid economic headwinds.
The success of Foxtons’ strategy will depend on whether regulatory complexity drives sufficient numbers of landlords to seek professional management services, and whether the company can execute acquisitions at favourable valuations in a consolidating market.
