FOXTONS REPORTS £3M REVENUE HIT FROM RENTERS' RIGHTS ACT

Foxtons, a London-listed estate agent, reported a £3 million reversal of revenue following the introduction of the Renters' Rights Act on 1 May. The firm recorded elevated levels of tenancy terminations during May and June, with student renters accounting for a notable proportion of the departures. The legislation abolished fixed tenancy terms and restricted landlords to raising rent no more than once annually. Foxtons said the short-term impact had created volatility in its business, though the company indicated it saw potential growth opportunities over the medium term.

The Renters' Rights Act represented the most significant transformation to the private rental sector since the 1980s, according to Foxtons, by shifting negotiating power from landlords towards tenants. Beyond the rental legislation, Foxtons' sales division faced additional pressure from domestic political uncertainty and the conflict in the Middle East, both of which the firm said had weakened buyer confidence. Mortgage lenders increased rates following escalation of hostilities between the US and Iran, raising interest rate expectations. These broader economic conditions pushed transaction volumes lower, prompting Foxtons to anticipate continued subdued market conditions ahead.

Foxtons stated it had implemented proactive measures to address any prolonged market difficulties resulting from these combined pressures. The firm's assessment suggested the revenue impact was temporary rather than structural, contingent on market conditions stabilising. The company did not specify the nature of the mitigation steps undertaken. Trading conditions in the estate agency and lettings sectors remained uncertain as the firm navigated both legislative change and broader economic headwinds.