Foxtons reports £3m revenue hit from Renters’ Rights Act
London estate agency Foxtons has reported a £3 million revenue impact following the introduction of the Renters’ Rights Act, according to a trading update issued ahead of its half-year results announcement on 30 July 2026.
The agency experienced elevated levels of tenancy terminations during May and June, particularly within the student rental sector. The company stated this resulted in “the reversal of approximately £3 million of previously recognised revenue that had been contractually due.”
Foxtons’ share price declined following the announcement before recovering some initial losses. Despite short-term volatility as the lettings market transitions to the new legislative framework, the company said it expects the Act to create growth opportunities in the medium term by increasing demand for professional lettings and property management services.
Sales market challenges
The company reported that the sales market has become more challenging due to domestic political uncertainty, conflict in the Middle East, and a higher-than-expected interest rate environment, resulting in lower market transaction volumes.
In response to anticipated prolonged lower transaction volumes, Foxtons has implemented operational and organisational changes to align the sales business with market conditions, with further adjustments under consideration.
The trading update noted: “Since the group’s first quarter trading update on 23 April 2026, trading has been adversely impacted by the prolonged downturn in the sales market, as well as short-term volatility in the lettings market following the introduction of the Renters’ Rights Act in May.”
Cost reduction measures
Foxtons has delivered £4.5 million of annualised cost savings in the first half of the year, comprising £3 million from a cost-reduction programme responding to sales market headwinds and £1.5 million from its January 2026 headquarters relocation. The company said these measures largely mitigated National Insurance cost increases and other inflationary pressures.
Looking ahead, Foxtons indicated it is focusing on the lettings market, which it described as “resilient”, while the sales market is expected to remain subdued amid ongoing political uncertainty and challenging macroeconomic conditions.
Financial outlook
The group expects to report half-year 2026 adjusted operating profit of approximately £8.5 million, down from £12.3 million in the same period last year. Full year 2026 adjusted operating profit is forecast to be in the range of £17 million to £19 million.
The figures provide an early indication of how rental sector reforms are affecting established agency businesses, particularly those with significant exposure to student lettings and fixed-term tenancy agreements. The revenue reversal highlights the immediate financial impact of legislative changes on agencies that had recognised future rental income under previous contractual arrangements.
