Foxtons has reported a 6% decline in third-quarter revenue to £45.9m, down from £49m in the same period last year, as the Renters’ Rights Act disrupted its lettings business and elevated mortgage costs continued to weigh on property sales.
The London-listed estate agency group saw lettings revenue fall 7% to £31.1m, whilst sales revenue declined 5% to £12m. Financial services revenue also dropped 7% to £2.9m during the three months to September.
Rental reforms trigger £5.7m impact
The company attributed much of the lettings decline to increased tenant-led early terminations following the introduction of the Renters’ Rights Act on 1 May. Foxtons reported a £2.7m revenue impact from elevated early terminations during the third quarter alone.
Across the first nine months of 2026, the impact reached £5.7m, with the highest level of terminations occurring in May and June. The company said early terminations eased throughout the third quarter and into October, suggesting the disruption may be temporary.
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 organic growth. Despite these gains, total lettings revenue for the first nine months fell 3% to £85.8m, reflecting broader challenges in the rental market.
Sales business continues decline
The sales division struggled against higher mortgage rates and weaker buyer confidence. Third-quarter sales revenue fell 5% to £12m, with average revenue per sale declining 8%. Foxtons attributed this to a greater proportion of lower-value transactions as mortgage affordability constrained buyers at higher price points.
The picture proved weaker across the first nine months, with sales revenue falling 10% to £35.5m despite a £1.1m contribution from acquisitions. The company cited economic uncertainty, geopolitical tensions and higher borrowing costs as factors weighing heavily on buyer activity in London. Regional markets proved more resilient, reinforcing the company’s decision to expand beyond the capital.
Cost reduction and acquisition strategy
Foxtons has continued to reduce costs whilst expanding its lettings portfolio through acquisitions. The group’s cost reduction programme delivered £4.5m in annualised savings, including downsizing its sales operation during the first half of the year.
The company completed four acquisitions in September, expanding operations in Birmingham, Watford and Reading. It expects the deals to deliver returns above its 20% return-on-invested-capital target, although those returns have yet to materialise. Foxtons said it has identified further lettings acquisition opportunities as it increasingly relies on recurring property management income to offset weakness in residential sales.
The financial services division reported a 7% decline in third-quarter revenue to £2.9m, attributed to smaller average mortgage sizes. However, revenue for the first nine months increased 9% to £8.3m due to refinancing activity and increased sales of additional financial products.
Management outlook
Guy Gittins, chief executive of Foxtons, said the business was adjusting to the new regulatory environment. “Lettings traded broadly in line with our expectations, with the initial disruption following the introduction of the Renters’ Rights Act moderating through the quarter and re-letting activity remaining robust,” he said.
Gittins called for the government’s Your First Home scheme to extend beyond new-build properties, arguing that stamp duty remained a major obstacle to housing transactions. The company is maintaining its full-year adjusted operating profit guidance of between £17m and £19m, in line with expectations set in July.
Overall group revenue for the first nine months fell 4% to £129.6m, compared with £135.1m in 2025. With sales revenue down 10% year-to-date and acquisitions accounting for much of the lettings growth, the group faces continued pressure to improve performance across its existing business, particularly as estate agents navigate evolving market conditions.
