EYE NEWS UPDATE: Sales slump hits Foxtons as lettings provides limited lift

Foxtons has reported a sharp fall in sales revenue in its Q1 trading update, reflecting weaker market conditions.

Sales revenue declined by 35% to £10.7m, down from £16.4m in the same period last year. The company attributed the drop in part to a strong prior-year comparator, when activity was boosted by buyers completing ahead of the 31 March 2025 stamp duty deadline, as well as a more subdued market in early 2026.

Compared with Q1 2024, when conditions were more typical, sales revenue was slightly higher at £10.7m versus £9.5m.

Foxtons also reported lower-than-expected new buyer activity during the quarter, citing uncertainty linked to geopolitical developments, rising mortgage rates and reduced product availability. In response, the group said it is adjusting its sales operations to better align with current market conditions.

Lettings 

Lettings revenue was up 5% to £26.4m (Q1 2025: £25.2m) reflecting what the agency described as £0.6m of organic revenue growth, £0.9m of incremental revenues from acquisitions and £0.2m lower interest on client monies.

Foxtons says organic growth was driven by continued momentum in the cross‑selling of property management services, growth in Build to Rent revenues, and further growth from the Reading acquisition in 2024.

The Group also continued to execute its acquisition strategy, completing two acquisitions of independent agents in Milton Keynes and Birmingham, as previously announced.

Supported by the industry‑leading Foxtons Operating Platform, these acquisitions are expected to drive organic growth through both revenue and cost synergies, while also enabling high‑ROI bolt‑on acquisitions in these regions. A pipeline of further acquisition opportunities exists and is currently being worked on.

Group revenue: 3 months ended 31 March

Financial services

Financial services revenue was up 3% in the quarter to £2.6m (Q1 2025: £2.5m), driven by good levels of refinance activity and growth in ancillary revenues. This helped to offset weaker new purchase activity amid lower sales market volumes.

Cost action and productivity

The group has responded to recent market headwinds with a proactive cost‑reduction programme targeting at least £3m of annualised savings, which is currently under way. This builds on the £1.5m of annualised savings already delivered through the HQ relocation effective from January 2026.

Central to this programme is repositioning the Sales business to optimise margins in a lower transaction environment. This is being delivered through enhancements to the operating model to reduce costs while protecting revenue. Key initiatives include reallocating headcount towards higher‑growth opportunities in Lettings, redeploying support roles into fee‑earning roles to drive productivity, and lowering support costs through more efficient workflows and processes.

Guy Gittins, chief executive officer, said: “Our strategic focus on recurring revenues has ensured that Foxtons has delivered a resilient performance despite recent market headwinds. In the quarter, we acquired Lettings businesses in the high-growth, complementary markets of Birmingham and Milton Keynes. This, combined with organic growth and increasing take up of our property management services, meant that Lettings revenues increased 5% in the period.

“The implementation of the Renters’ Rights Act on 1 May 2026 is expected to create growth opportunities for Foxtons. Higher regulatory requirements further underline the importance of working with a trusted, professional agent, and Foxtons’ scale, expertise and compliance capabilities position the business to protect landlords’ investments and capture market share.

“The sales market remains subdued and has been further affected by recent events in the Middle East, which have tempered buyer sentiment and impacted mortgage rates and availability. As ever, Foxtons is focused on what we can control by managing costs, increasing efficiencies and repositioning our Sales business to mitigate the impact of the market.

“We remain confident that the resilience of our Lettings and Financial Services businesses, which represents more than two thirds of revenues, alongside work to reposition the Sales business, can continue to deliver market-leading results for customers, growth opportunities for our people and long-term value creation for shareholders.”

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