London estate agency Foxtons has reported a £2.3 million decline in third quarter revenue, attributing £2.7 million of the impact to tenant-led early terminations following the introduction of the Renters’ Rights Act on 1 May 2026.
The agency’s Q3 trading update showed total revenue fell 7% to £31.1 million compared to the same period last year. Before accounting for the impact of the legislation, revenue was marginally ahead year-on-year, including £1 million of incremental revenue from acquisitions.
Early terminations ease through quarter
Foxtons indicated that early terminations eased throughout the third quarter and into October, suggesting the elevated activity represents a short-term transition following the introduction of the reforms rather than a sustained trend. The company said it expects to see longer-term benefits from the Renters’ Rights Act despite the initial volatility.
The lettings disruption comes as void periods in the rental market have been lengthening, adding pressure to agency revenues dependent on swift tenant turnovers.
Sales division under pressure
The agency’s sales division also faced headwinds, with third quarter sales revenue declining by £600,000, or 5%, to £12 million. Like-for-like transaction volumes remained broadly stable, but average revenue per transaction fell 8%, reflecting a shift towards lower-value properties as higher mortgage rates affected buyer affordability at higher price points.
Year-to-date sales revenue declined by £4 million, or 10%, to £35.5 million. The company said it has maintained market share following a downsizing of the sales business in the first half of the year to protect profitability.
Regional expansion continues
Chief Executive Officer Guy Gittins said the company delivered a “resilient performance” despite challenging market conditions. In September, Foxtons completed four acquisitions to expand its Birmingham operations and strengthen positions in Watford and Reading.
Gittins commented on the Government’s Your First Home scheme announced in last week’s Budget, arguing it should not be limited to new builds. “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.
The company is focusing on technology improvements including AI to improve productivity across the group, alongside growing recurring lettings revenues and delivering returns from acquisitions.
Outlook maintained
Despite the third quarter challenges, Foxtons said the group is trading in line with management’s expectations and expects full-year adjusted operating profit to be within the £17 million to £19 million range guided in July. The company remains confident in its long-term growth potential, supported by its operational platform and strategic priorities.
