Foxtons profit rises as buyer activity jumps despite election uncertainty

Sign up to our free Brexit and beyond email for the latest headlines on what Brexit is meaning for the UK

Sign up to our Brexit email for the latest insight

Please enter a valid email address

Please enter a valid email address

SIGN UP

I would like to be emailed about offers, events and updates from The Independent. Read our privacy policy

Foxtons has said that pent-up demand in the housing market helped offset General Election uncertainty and interest rates remaining at 16-year highs as sales under offer hit the highest level since 2016.

The London-based estate agency said buyer activity “picked up significantly”, with sales agreed up 18% year-on-year and its pipeline of sales under offer standing more than a fifth higher (21%) as at June 30 – the highest level since the Brexit vote eight years ago.

The firm said: “It is worth noting the growth in buyer activity was sustained due to pent-up demand in the market despite little change in mortgage rates over the period and the political uncertainty following the announcement of the General Election in May.”

But it added that there had been little change in the market or buyer and rental behaviour in July since the election earlier this month.

Foxtons said an interest rate cut – which some experts believe could come as soon as this Thursday – would act as a further boost to buyer demand.

“Further growth in buyer activity is likely if we begin to see a reduction in inflation feeding through into lower interest rates,” it said.

London’s rental market is continuing to “normalise” as supply has started to grow, which has seen rent prices level off, according to Foxtons.

It said rents for new deals were flat year-on-year, albeit at high levels after prices have soared in the capital in recent years.

Foxtons reported pre-tax profits up 24% at £7.5 million in the first half on revenues 11% higher at £78.5 million.

Lettings revenue rose 5% to £52.4 million, while sales revenue jumped 28% to £21.6 million.

Guy Gittins, chief executive of Foxtons, said: “Despite macro headwinds and the election interruption, we continued to outperform the market.”

He added: “The work we did to rebuild the business’ foundations continues to deliver progress; we are growing the non-cyclical and recurring lettings business, our sales under-offer pipeline is at a record level since the Brexit vote in 2016, and we are on track to deliver against our medium-term target of £25 million to £30 million adjusted operating profit.”