Foxtons Group (LSE:FOXT), London's largest lettings agency and a major estate agency brand, said trading has weakened since its 23 April trading update, hit by a prolonged sales market downturn and volatility following the Renters' Rights Act introduced in May.
The company now expects half-year adjusted operating profit of approximately £8.5m, down from £12.3m in the same period last year, which had been boosted by elevated sales activity ahead of the March 2025 stamp duty deadline.
The new legislation abolished fixed tenancy terms, and elevated tenancy terminations in May and June, particularly in student rentals, forced Foxtons to reverse approximately £3m of previously recognised revenue.
The sales market has become more challenging amid political uncertainty, conflict in the Middle East, and a higher-than-expected interest rate environment, prompting the group to consider further operational and organisational changes to align its sales business with lower transaction volumes.
Financial Services delivered revenue growth on stronger refinance volumes and cross-sell, while Foxtons said it remains confident the Renters' Rights Act will drive medium-term growth by increasing demand for professional lettings and property management.
The group has delivered £4.5m of annualised cost savings in the first half, including £3m from a proactive cost-reduction programme and £1.5m from its January HQ relocation.
Foxtons expects full-year 2026 adjusted operating profit in the range of £17m to £19m, weighted toward the second half as tenancy termination levels normalise.
The group will report half-year results on 30 July.
