- Foxtons says early tenancy exits wiped around £3 million from expected revenue.
- Student renters left properties in higher numbers after fixed-term contracts ended.
- The company also warned that weaker home sales are weighing on profits.
Foxtons has revealed that changes introduced under the Renters' Rights Act have cost the estate agency around £3 million in revenue after a surge in student tenants ended their rental agreements earlier than expected.
The London-based property group said the new UK rental rules, which came into force in May, led to an unusually high number of tenancy terminations during May and June, particularly among students. The changes have added short-term pressure to its lettings business, even as the company expects the reforms to support long-term demand for professional property management.
The Renters' Rights Act replaced fixed-term tenancy agreements in England with open-ended or rolling contracts, allowing tenants to leave their homes at any time by giving two months' notice.
According to Foxtons, the policy change prompted many student renters to end their agreements earlier than anticipated.
The company reportedly said the higher number of tenancy terminations resulted in the reversal of approximately £3 million in revenue that had previously been recognised under existing contracts.
While acknowledging that the market is adjusting to the new legislation, Foxtons said it believes the reforms could eventually increase demand for professional lettings and property management services as landlords seek greater support in managing more flexible tenancy arrangements.
Housing market remains under pressure
Beyond the rental market, Foxtons also warned that conditions for home sales have become more challenging.
The company said political uncertainty in the UK and the ongoing conflict in the Middle East have weakened consumer confidence and contributed to interest rates remaining higher for longer. As a result, housing transactions have slowed since April, with the sales market expected to remain subdued in the near term.
Foxtons now expects to report an adjusted operating profit of £8.5 million for the first half of the financial year, compared with £12.3 million during the same period a year earlier.
The company noted that last year's housing market had benefited from a rush of buyers completing purchases before stamp duty relief became less generous following changes introduced in April 2025, making year-on-year comparisons more difficult.
To offset rising costs, including higher National Insurance contributions, Foxtons said it has identified around £4.5 million in annual cost savings.
Investors reacted cautiously to the trading update, with Foxtons' shares falling by around 10 per cent in early trading.
