Foxtons has reported lower first-half profits after a weaker sales market and the introduction of the Renters’ Rights Act weighed on trading, despite continued resilience in its lettings business.
The London-focused estate agency group reported revenue of £83.7m for the six months to 30 June, down 3% on the same period last year, while pre-tax profit fell 57% to £4.4m.
Sales revenue declined 13%, with Foxtons citing lower transaction volumes following last year’s stamp duty-driven activity, alongside weaker consumer confidence, higher-than-expected interest rates and geopolitical uncertainty.
Lettings revenue was broadly flat. Growth in the group’s Build to Rent operations, landlord services and recent acquisitions was offset by a £3m reversal of previously recognised revenue after an increase in tenant-led tenancy terminations following the introduction of the Renters’ Rights Act.
The group said the revenue reversal had a direct impact on profitability, contributing to a 29% fall in adjusted operating profit to £8.9m.
Financial Services provided a brighter spot, with revenue rising 20%, driven by stronger refinancing activity and increased ancillary income.
Foxtons said recurring and non-cyclical income streams now account for 69% of total revenue, up from 65% a year earlier, reflecting its continued focus on growing more resilient sources of income.
The company also implemented cost-saving measures during the period, generating £1.3m of savings in the first half and expecting annualised benefits of around £4.5m.
Net debt increased to £28.4m, reflecting lower cash generation, acquisition spending of £8.8m and shareholder returns. The group’s revolving credit facility has been increased from £40m to £50m to support future growth.
Despite the more challenging trading environment, Foxtons maintained its interim dividend at 0.24p per share.
The group said the operational and cost actions taken during the first half leave it better positioned for future growth, despite ongoing uncertainty in both the sales and lettings markets.
|
H1 2026 |
H1 2025 |
Change |
|
|
Revenue |
£83.7m |
£86.1m |
(3%) |
|
Adjusted EBITDA1,2 |
£10.4m |
£13.9m |
(25%) |
|
Adjusted operating profit1,3 |
£8.9m |
£12.5m |
(29%) |
|
Profit before tax |
£4.4m |
£10.2m |
(57%) |
|
Adjusted earnings per share (basic)1,4 |
1.8p |
2.8p |
(36%) |
|
Earnings per share (basic) |
1.0p |
2.5p |
(60%) |
|
Net free cash flow5 |
£1.4m |
£3.6m |
(62%) |
|
Interim dividend per share |
0.24p |
0.24p |
– |
In Lettings:
+ Growth in value-add services including 17% growth in revenues from ancillary landlord and tenant services, and 10% growth in the cross-sell of property management services, as Foxtons aim to capitalise on growth opportunities post RRA.
+ 29% growth in Build to Rent revenues through deepening partnerships with institutional clients.
In Sales:
+ Completed a detailed operational review and implementing operating model changes to optimise the business for the prevailing lower-volume market. Cost savings have been delivered through rightsizing actions, while ongoing operational enhancements are expected to drive further improvement in productivity, efficiency and margins.
+ 33% growth in high-margin cross-sell revenues, including Foxtons’ auctions offering.
In Financial Services:
+ Operational improvements drove higher levels of client retention and cross-sell revenues.
+ Enhanced connectivity with estate agency supported robust new purchase mortgage revenues.
+ Progressing their buy, build and bolt-on strategy with two platform acquisitions in Milton Keynes and Birmingham. Further growth is targeted through market share gains and a pipeline of bolt-on acquisitions. Performance to date is in line with expectations.
+ £4.5m of annualised cost savings implemented. Includes £3m of savings from a proactive cost-reduction programme in response to sales market headwinds, and builds on £1.5m of savings delivered from the January 2026 HQ relocation which largely mitigates National Insurance cost increases and other inflationary pressures. The financial benefit of the cost savings is H2 weighted.
2026 trading and outlook
Underlying drivers of the lettings market remain robust, with demand continuing to outstrip supply. The impact of elevated tenant terminations has moderated since May, with levels expected to stabilise over H2. Foxtons do not expect significant changes in tenant behaviour or occupation levels over the medium-term.
The RRA is expected to create growth opportunities over the medium-term, by driving a flight to large, quality agents, increasing adoption of ancillary services, linking revenues to inflation through new annual rent reviews enabled under RRA, and accelerating consolidation in the sector.
The London sales market remains challenging, with buyer activity continuing to be held back by weak consumer confidence and higher interest rates. Foxtons continues to optimise the operating model for these lower-volume markets.
As guided in the trading update on 16 July, the Group expects full year 2026 adjusted operating profit to be in the range of £17m-£19m, with performance weighted towards H2. This reflects Lettings seasonality, the expected stabilisation of early tenant terminations and cost actions taking effect. The Group remains focused on managing continued market headwinds, whilst strengthening its position for future growth.
Guy Gittins, chief executive officer, said: “Against a challenging backdrop of continued sales market weakness and short-term lettings volatility, we continued to execute on our strategy, with our long-term focus on accelerating growth in non-cyclical and recurring Lettings revenues underpinning performance through these headwinds.
“In Sales, we’ve taken action to align the business with market conditions and support performance at lower transaction volumes. With 2026 likely to prove one of the lowest years for London transaction volumes on record, we urge the new cabinet to prioritise Stamp Duty reform, which remains the single biggest barrier to home moving – for first-time buyers trying to get on the ladder, for growing families and for those looking to downsize.
“Whilst the Renters’ Rights Act has created a period of transition for the sector, we are already seeing encouraging early benefits, including increased demand for property management services and continued growth in Build to Rent. The underlying performance of our Lettings business remained strong and we continued to execute against our growth strategy, expanding into two new complementary, high-growth markets through acquisition.
“We remain confident the Act will strengthen Foxtons’ long-term growth opportunity by increasing demand for professional agency services and accelerating industry consolidation. This is creating attractive opportunities to expand our footprint and increase market share, and we intend to build on the momentum of recent acquisitions through a pipeline of bolt-on opportunities, complemented by targeted organic investment. With our strong brand, scalable platform and a clear growth strategy we remain well positioned to create long-term value for shareholders.”
