- The estate agency revealed that profit before tax fell by 34% to £7.9m
- It also added that lettings revenue jumped 16% to £101.2m
Foxtons revenues generated by house sales slumped last year, but the estate agent’s performance was buffered by a jump in rental income.
The London-listed group’s sales revenue fell 14 per cent to £37.2million in 2023 while the number of houses sold sank by 11 per cent year-on-year, reflecting higher mortgage rates and weaker mortgage availability.
But Foxton’s annual revenue rose 5 per cent to £147.1million, as lettings revenue – which accounted for about 70 per cent of turnover – jumped 16 per cent to £101.2million despite a 6 per cent fall in the number of properties letted.
The London-listed estate agency reported saw a 34 per cent drop in profits before tax to £7.9million
It reported a 34 per cent drop in profits before tax to £7.9million, largely as a result of one-off costs including closing some of its branches.
Commenting on the fall in house sales, Foxtons said transaction volumes ‘were at some of the lowest levels since 2008 and 2020, years impacted by the global financial crisis and the Covid-19 market shutdown respectively.’
However, Foxtons noted that mortgage rates had begun to dip below 4 per cent towards the end of the year, from levels of around 6 per cent 12 months earlier, helping to lift demand.
Guy Gittins, chief executive officer, of Foxtons said: ”Our strategy to deliver growth through sales market cycles by delivering lettings growth is working, delivering resilient earnings for the year despite a weak sales market and the investment we made in fee earners.
‘We are on track against our medium-term target of delivering £25million to £30million of adjusted operating profit, through organic and acquisitive growth and supported by improving market conditions.’
In recent times, Foxtons has largely benefitted from its letting business. The UK capital is home to the country’s highest rental prices, which have seen enormous increases since 2021.
This is in part because landlords who have seen their mortgage payments spike have passed on the extra cost to their tenants.
Higher rents equal more commission for lettings agents – and the firm also earns interest on tenant deposits which it holds.
Office for National Statistics data shows that average rental prices in London were up by 6.9 per cent in the 12 months ending November 2023.
In addition to a healthy 28 per cent year-on-year jump in its sales business, Foxton’s scored a 36 per cent increase in lettings sector market share last year
Foxtons shares were down 3.02 per cent to 57.90p in early afternoon trading on Tuesday.
Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown said: ‘Estate agents will always feel the pain at times of economic stress, but Foxton’s market share means it’s in a better position than some in the short-term.’
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