Foxtons has reported a £3 million reduction in revenue attributed to the recently enacted Renters' Rights Act, which has led to a surge in tenancy terminations. The estate agent observed an "elevated level of tenancy terminations" in May and June, with a notable increase among student renters.
The Renters' Rights Act, which came into effect on May 1, has abolished fixed tenancy terms and restricted landlords to raising rent only once annually. This legislation represents a significant shift in the private rental sector, altering the balance of power in favor of renters.
While the short-term volatility has resulted in the reversal of approximately £3 million in revenue, Foxtons believes the act may present "growth opportunities over the medium term." However, the company's sales division has faced additional challenges, influenced by domestic political uncertainty and the ongoing conflict in the Middle East, which have weakened confidence and contributed to rising interest rate expectations. Lenders have reportedly increased mortgage rates following renewed hostilities between the US and Iran.
Foxtons anticipates that market transaction volumes will remain subdued due to this uncertainty. The company has stated it is taking "proactive steps" to mitigate potential prolonged issues, with operational and organizational changes under consideration. Foxtons shares experienced a 9.9% drop, reaching 39.24p, and have fallen over 30% year-to-date. The company now projects first-half profits of £8.5 million, a decrease from the £12.3 million reported in the first half of 2025, which was boosted by buyers anticipating changes to the stamp duty regime.