Not for the first time this year, a trading update from London-focussed agency Foxtons has shown that lettings is leading the agency’s growth drive.
Its strategy of buying lettings businesses plus organic growth in the capital’s rental sector has pushed revenue up 5.0 per cent to £114.8 million despite sales market volumes being down 23 per cent in the current poor sales market.
In a third quarter trading update to shareholders the agency reported lettings revenue was up over the quarter by 8.0 per cent to £31.6m and up 18 per cent over the year to £81.3m.
Sales revenue was down 17 per cent to £9.9m while the Foxtons group’s financial services division says revenue fall 13 per cent in Q3 to £2.4m and down 12 per cent to £6.6m on a year-to-date basis. The agency says its financial services dip reflects the poor mortgage market generally.
Foxtons chief executive Guy Gittins - just a year in the job - says: “Our investment in fee earners, training, data and brand is yielding results sooner than I expected, and is now delivering material benefits to our competitiveness and market positioning.
“Market share gains across Lettings, Sales and Financial Services have enabled us to grow revenue year-to-date despite reduced sales market transaction volumes, a result of the higher interest rate environment.
“The operational progress made to date, and our continued focus on growing non-cyclical and recurring revenues to decouple earnings from sales market volatility, gives me confidence that we will continue to deliver against our strategic priorities and medium-term profit ambitions.”
Separately, Foxtons internal data shows that buyer applicant levels have increased by 27 per cent between September and October, with this month also seeing 69 per cent more applicants versus October 2022, with this number expected to increase further by the end of the month.
Using longer term data the agency says Harrow has seen the sharpest return to form, with transaction levels up 43.4 per cent followed by Kensington and Chelsea and Redbridge (both 42.9 per cent).
Sellers are also returning to the fold, with the number of homes listed for sale hitting 101,457 in September of this year, marking a full return to pre-mini budget market conditions, with every borough seeing an increase in stock for sale versus the previous low seen in March of this year.