Foxtons hails best under-offer homes pipeline since Brexit referendum

Foxtons has said the value of under-offer homes is at its strongest since the Brexit vote, marking the latest sign of improving conditions across the UK property market.

The estate agency revealed its under-offer pipeline at the end of March was more than a third higher than the same time last year and 12 per cent up on 2022 levels.

It expects the pipeline to support revenue growth during the second quarter, helped by ‘stabilised’ mortgage rates and a healthy quantity of housing stock.

The London-based firm reported turnover rose by 9 per cent to £35.7million in the first three months of 2024, following robust performances in all business segments.

Approximately half the gains came from sales revenue, which shot up by 17 per cent to £9.5million, which Foxtons credited to a ‘significant increase’ in its share of market transactions.

By comparison, lettings revenues expanded by only 5 per cent to £22million as the UK capital’s rental sector began normalising amid greater supply.

Guy Gittins, chief executive of Foxtons, said: ‘This has been a strong start to the year with our revenue growth demonstrating the real momentum we have built across the business.’

Under Gittins, who previously ran Chestertons, Foxtons has regained its status as the largest estate agent in London by market share and new instructions.

The firm’s turnover has rocketed in recent years, as rents have soared to record highs on successive Bank of England base rate hikes. 

Many landlords also sold up after the UK Government eliminated mortgage interest relief and introduced tougher energy efficiency regulations, putting further upward pressure on prices.

Average rents in London grew by 11.2 per cent in the 12 months ending March, the biggest increase of any region, according to the Office for National Statistics.

Because prices have climbed so much, estate agents can earn much fatter commissions when properties are rented out. Foxtons now derives about 70 per cent of its revenue from lettings.

This has helped the company turn a profit for the past three years, although its pre-tax profits fell by 34 per cent to £7.9million in 2023 owing to one-off costs from acquiring rival Ludlow Thompson and closing some branches. 

Gittins added: ‘We are well placed to continue to unlock value within our business, drive growth, and ultimately deliver against our medium-term adjusted operating profit target.’

Foxtons Group shares were 0.8 per cent up at 52.6p on late Thursday afternoon, although they remain below pre-pandemic levels.