- Foxtons Group
- 16 July 2026 10:06:49
Source: Sharecast
In an update ahead of its half-year results, the London estate agent said that following the introduction of the RRA - which abolished fixed tenancy terms and increased tenant flexibility to terminate tenancies - there have been high levels of tenancy terminations in May and June, particularly in student rentals.
This resulted in the reversal of around £3m of previously recognised revenue that had been contractually due.
Meanwhile, the sales market has become more challenging, it said, as domestic political uncertainty and the conflict in the Middle East have dented consumer confidence and led to a higher-than-expected interest rate environment, resulting in lower market transaction volumes.
In anticipation of a prolonged lower transaction volume environment, Foxtons said it has taken proactive steps to align the sales business with market conditions, with further operational and organisational changes under consideration.
"Notwithstanding 2026 being a year of transition for the sector due to the introduction of the RRA, the lettings market remains resilient, reinforcing the group's focus on this market," the company said.
However, the sales market is expected to remain subdued and Foxtons now expects full-year 2026 group adjusted operating profit of between £17m and £19m, down from £22.2m in the year to the end of December 2025.
At 1000 BST, the shares were down 10.5% at 38.98p.
Dan Coatsworth, head of markets at AJ Bell, said: "The Renters’ Rights Act has caused all kinds of problems for Foxtons. It’s given more power to tenants, and they’ve been quick to take control. This includes being able to give notice and leave before the end of what used to be a fixed-term lease.
"Foxtons has been hit by tenants getting out of contracts earlier than previously expected, meaning it’s had to reverse £3 million worth of previously recognised revenue.
"At the same time, the sales market has been miserable. Expectations for interest rates to stay higher for longer is bad for mortgage pricing and that’s caused affordability issues for many aspiring homeowners.
"For those able to get financing, it’s a buyer’s market which means many people are snapping up properties below asking price. Foxtons charges a commission based on a percentage of the final sale price - so lower prices mean a lower cut for the estate agent.
"Not all sellers want to let their home go on the cheap, so many people are sitting tight and either waiting for the right offer or they’re pulling their home off the market. All this adds up to problems for Foxtons as overall there are lower transaction volumes."
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