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Interview: Foxtons CEO talks growth, keeping Alexander Hall and war in Ukraine

Nic Budden talks about Foxtons' perkier performance, why he decided to keep Alexander Hall, and what Ukraine means for the London sales market.

Nigel Lewis

nic budden foxtons

This week’s results are one of Foxtons best in recent years – where has the growth come from?

“We have several burgeoning areas of the business. These include our Asia Pacific desk serving the increasing numbers of investors, buyers and renters from that area of the world; our three-year-old Built to Rent business which saw revenues increase by 69% last year; and our Private Office arm which offers high-net-worth individuals a tailored sales or renting experience. This has doubled its revenue since 2020.

“Foxtons has also been successful at increasing its revenues from cross-selling our own products within our Alexander Hall business and conveyancing, and last year 50% of our sales transactions sold products from one of those two operations.

“Looking into the future, we believe Boomin’s Property Playground could be an interesting revenue stream for us because we’re looking at how we could cross-sell a wider range of products. Things like furniture and insurance.

Why did you decide not to sell your Alexander Hall mortgage business?

“Our challenge was that our business generates more mortgage leads than we can deal with.

“Our choices were to a) sell the spare leads b) sell the business and pass on all the leads to a third party c) invest in the business so it can cope with a larger capacity. We chose the third option.

“Once we have achieved that, then perhaps we can look at developing the Alexander Hall brand to bring in leads from outside the business.”

Your branch and employee productivity has jumped – what’s going on there?

“That’s down to three things – improved market share for the second year in a row; a more buoyant sales market post-Covid, and our investment in marketing which means our conversion rates are improving, all of which are increasing productivity.

Will the Ukraine war and the West’s actions against Russia affect your sector of the London sales market?

“Our average sales property is between £280,000 and £800,000 so we are not dealing with Russian Oligarchs on a regular basis.

“If you look at the past few weeks when this geopolitical thing has arisen, we have not witnessed a deterioration in listings, offers or exchanges.

“Economic disruption always hits the property market so we’ll have to wait and see in the longer term how that pans out.

“We’ve started 2022 strongly with more stock coming on and increased numbers of valuations and a strong ‘under-offer’ pipeline that’s as good as it was during the stamp duty holiday. It’s a good place to be.

“In lettings, rental stock is an issue, but our acquisitions [of Douglas and Gordon and other agencies] have been successfully integrated.”

Is Build to Rent (BTR) really an opportunity for agents? Don’t the big operators just want to do it in-house?

“We have a market-leading 22% of the London BTR market, and I disagree with your assertion.

“What we’ve found with the ones we work with, and they are some of the biggest, is that they see the value in having an agent to do the lettings.

“It’s something that is complicated, requires a lot of operational knowledge and sales ability as well as compliance and regulatory expertise. And to fill these large developments quickly as they come on stream, you need all of that.”

March 3, 2022

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