Foxtons profit jumps despite ‘challenging’ sales market
Foxtons reported a jump in profit for the first half of the year, but warned that the wider sales market “continues to remain challenging”.
The estate agency posted £6.1m in pre-tax profit, up from £4.3m year on year.
Foxtons said that overall revenue for the period was up nine per cent to £70.9m as “strong lettings growth more than offset the expected reduction in H1 sales volumes”.
Lettings revenues soared 26 per cent to £49.8m, while sales revenue dropped 19 per cent to £16.9m.
While it said that sales volumes for this month “were ahead of the H1 2023 run-rate” new buyer enquiries “softened in July in reaction to mortgage rate rises”.
“The wider sales market continues to remain challenging, primarily driven by higher inflation levels and associated interest rates,” the firm said. “However, should inflation moderate, buyer demand may rebound strongly, underpinned by ongoing demand for London residential property.”
Despite the dip in the sales business and headwinds of rising rates, the firm remained upbeat.
“In Sales, although revenues were down due to the September 2022 mini-budget, which impacted the under-offer pipeline at the start of the year, we significantly grew market share, rebuilt the pipeline at the fastest rate in the last 5 years and agreed a similar level of new sales as last year, despite challenging market conditions,” Guy Gittins, Foxton’s chief executive, said.
“Looking ahead, despite the uncertainty in the sales market, our resilient and growing Lettings business combined with continuing Sales market share gains and a strengthened sales culture, means we are well positioned for the rest of the year,” he added.