Foxtons reports strong results as renters return in droves to London
Estate agent Foxtons has reported strong third quarter results, driven by sales transactions at their highest level in five years and rental tenants returning to their pre-Covid living arrangements in the City.
The sales and lettings agency reported sales revenue of £38.3m, up 114 per cent from £17.9m in the third quarter last year, and £15m above 2019 levels.
This increase was down to positive trading momentum in the residential sales market, and Foxtons suggested that the increase on pre-pandemic levels “provides confidence that the increase in sales market transactions in London is not just a function of temporary stamp duty relief.”
The company’s acquisition of rival Douglas & Gordon, the family-owned London estate agents, for £14.3m was announced in March. The investment paid off as its portfolio of almost 3,000 tenancies brought in £7.1m in the third quarter, and its sales branch raked in £4.8m.
Foxtons said the lettings market in London had started the third quarter with an excess supply of listings, and that rents in the first half of the year had been down 9 per cent on pre-pandemic levels.
But this trend has now “largely reversed” by the end of the three months to September 30, with listings now at “historically low levels” and rents at pre-pandemic levels again.
At the end of the quarter, the group’s cash position was £24.5m, and following the announcement of its £3m share buyback programme to return excess capital to its shareholders at its interim results, £1.6m shares had been repurchased by the end of September.
Looking ahead, CEO Nic Budden was confident these trends would continue and said: “We have good momentum going into the fourth quarter, with rents back to 2019 levels and an under offer sales pipeline that is significantly ahead of 2019 levels.”