Foxtons’ revenue has already taken a hit of around £3million due to the Renters’ Rights Act.

A trading update from the estate agency brand this morning ahead of the announcement of its half-year results on 30 July 2026, revealed the early impact of the rental reforms.

Foxtons said the group experienced elevated levels of “tenancy terminations” during May and June, particularly in student rentals.

It said: “This resulted in the reversal of approximately £3million of previously recognised revenue that had been contractually due.”

Foxtons’ share price fell this morning on the news, before recouping some of those initial losses.

This resulted in the reversal of approximately £3million of previously recognised revenue that had been contractually due.”

Despite some short-term volatility while the lettings market transitions to the new legislative framework, Foxtons said it remains confident that the Renters’ Rights Act will create growth opportunities in the medium term by increasing demand for professional lettings and property management services.

Slower sales

In sales, Foxtons said the sales market has become more challenging due to domestic political uncertainty and conflict in the Middle East as well as the higher-than-expected interest rate environment, which it said has resulted in lower market transaction volumes.

Foxtons said: “In anticipation of a prolonged lower transaction volume environment, the group has taken proactive steps to align the sales business with market conditions, with further operational and organisational changes under consideration.

The update said: “Since the group’s first quarter trading update on 23 April 2026, trading has been adversely impacted by the prolonged downturn in the sales market, as well as short-term volatility in the lettings market following the introduction of the Renters’ Rights Act in May.”

Uncertain outlook

Looking ahead, Foxtons said it is focusing on the lettings market – which “remains resilient,” – while the sales market is expected to be subdued “amid ongoing political uncertainty and a challenging macroeconomic backdrop.”

The group has delivered £4.5million of annualised cost savings in the first half of the year, with £3million from a cost-reduction programme in response to sales market headwinds and builds on £1.5million of savings delivered from the January 2026 HQ relocation.

Foxtons said this largely mitigated National Insurance cost increases and other inflationary pressures.

The group expects to report half-year 2026 adjusted operating profit of approximately £8.5million, down from £12.3million in the same period of last year.

Full year 2026 adjusted operating profit is expected to be in the range of £17million to £19million.