The amount of commission earned by Foxtons’ sales negotiators dropped by almost a fifth this summer compared with last, offering the latest evidence of the subdued housing market.
However, Foxtons’ shift in recent years to focus more heavily on lettings, where rents repeatedly are hitting fresh record highs, meant that its overall revenues between July and September were almost identical to the amount it pulled in during the same three-month period of 2022.
Guy Gittins, the chief executive, said that this year’s annual profits would be in line with what City analysts had predicted, but that did little for the share price, which closed down 3p, or 7.6 per cent, at 35p.
Foxtons, whose agents drive green-and-yellow Minis, is one of the best-known estate agents in London, which is where almost all its 60 or so branches are located. For the three months to the end of September, the group turned over £43.9 million, £100,000 more than in the same period of 2022.
“Our investment in fee-earners, training, data and brand is yielding results sooner than I expected and is now delivering material benefits to our competitiveness and market positioning,” Gittins, 43, said.
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There were 23 per cent fewer house sales in London this summer compared with last, but Foxtons’ sales revenues fell by only 17 per cent to £9.9 million. The agency put the outperformance down to market share gains and the fact that it was winning more higher-value properties than before.
Foxtons expects its sales team to have a tricky autumn and winter, however — although with mortgage rates having stabilised and prices having dropped, it thinks the pipeline of homes under offer at the end this year will be “significantly higher” than it was at the end of 2022 in the wake of Liz Truss’s mini-budget.
Gittins, who was appointed chief executive just over a year ago, is keen to expand the lettings business, which is less at the mercy of the booms and busts of the property cycle.
Foxtons’ lettings fees increased by 8 per cent to £31.6 million in the third quarter, a chunk of which came from Atkinson McLeod, a rival agent bought by Foxtons earlier in the year. The lettings division also has benefited from record high rents in the capital, although rental price inflation is “expected to moderate” over the next few months.
