- Foxtons revealed its underbid pipeline was around a third higher than 2023 levels.
- It expects the portfolio to support revenue growth during the second quarter.
Foxtons has said the value of undersupplied homes is at its highest level since the Brexit vote, marking the latest sign of improving conditions across the UK housing market.
The estate agency revealed that its undersupply pipeline at the end of March was more than a third higher than at the same time last year and 12 per cent higher than 2022 levels.
The portfolio is expected to support revenue growth during the second quarter, helped by “stabilized” mortgage rates and a healthy amount of housing stock.
Boom time: Foxtons has said the value of undersupplied homes is at its highest since the Brexit vote, in a major sign of improving conditions across the UK property market.
The London-based company reported that turnover rose 9 percent to £35.7 million in the first three months of 2024, following strong performance across all business segments.
About half of the profits came from sales revenue, which soared 17 per cent to £9.5m, which Foxtons attributed to a “significant increase” in its share of market transactions.
In comparison, rental income rose just 5 per cent to £22m as the UK capital’s rental sector began to normalize amid increased supply.
Guy Gittins, chief executive of Foxtons, said: “This has been a good start to the year and our revenue growth demonstrates the real momentum we have created across the business.”
Under Gittins, who previously ran Chestertons, Foxtons has regained its status as London’s largest estate agent by market share and new instructions.
The company’s turnover has soared in recent years as rents have soared to record levels following successive increases in base rates from the Bank of England.
Many homeowners also sold after the UK government removed mortgage interest relief and introduced stricter energy efficiency regulations, putting further upward pressure on prices.
Average rents in London rose 11.2 per cent in the 12 months to March, the biggest increase of any region, according to the Office for National Statistics.
Because prices have risen so much, real estate agents can earn much higher commissions when properties are rented. Foxtons now makes around 70 per cent of its income from rentals.
This has helped the company turn a profit over the past three years, although its pre-tax profits fell 34 per cent to £7.9m in 2023 due to one-off costs from the acquisition of rival Ludlow Thompson and the closure of some branches.
Gittins added: “We are well positioned to continue to unlock value within our business, drive growth and ultimately deliver on our medium-term adjusted operating profit target.”
Foxton Group Shares They were up 0.8 per cent on Thursday afternoon at 52.6p, although still below pre-pandemic levels.