London property market recovery drives Foxtons’ revenues beyond £1bn as sales income more than doubles
- Revenues rose 50% in the first nine months of the year compared to 2020 levels
- Property sales revenues jump by 114% per cent on 2020 levels to £38.3m
- Analysts: ‘There are signs the lettings market is starting to normalise’
Foxtons Group saw revenues rise by 50 per cent in the first nine months of 2021 on the same time last year, with the estate agent buoyed by a rebound in London’s property market.
The estate agent saw revenues from property sales balloon by 114 per cent on 2020 levels and 61 per cent on two years ago to £38.3million, as overall revenues came in at just over £1billion for the period.
Foxtons told investors on Thursday that its third quarter began with an excess supply of listings and rents down 9 per cent on pre-Covid levels, but that this trend has now largely reversed with lettings listings now at ‘historically low levels and rents having returned to pre-pandemic levels in August and September’.
Revenues from property sales balloon by 114% on 2020 levels and 61% on two years ago to £38.3m
It said it was confident that increase in sales market transactions in London is ‘not just a function of temporary stamp duty relief’, adding that while ‘we don’t have full visibility on future market volumes…the pipeline is encouraging and indicates that revenues in Q4 will be ahead of 2019 levels’.
Lettings revenues were up 28 per cent and 8 per cent on 2020 and 2019, respectively, to £58million in the first nine months of the year.
Meanwhile mortgage broking revenues were up 25 per cent on 2020 levels and 19 per cent on 2019 levels to £7.2million, ‘driven by stronger sales market conditions having increased demand for new purchase mortgages’.
Group CEO Nic Budden said: ‘Foxtons has traded well during the first nine months of the year. In the third quarter we helped record numbers of tenants find suitable properties as many returned to pre-pandemic work or study arrangements.
‘The sales business has had a strong year reflecting market share growth, increasing prices and transaction volumes which have been at their highest levels since 2016. We have good momentum going into the fourth quarter, with rents back to 2019 levels and an under offer sales pipeline that is significantly ahead of 2019 levels.’
Foxtons shares dipped 0.8 per cent in morning trading to 47.6p.
Analysts at Peel Hunt, who maintained a ‘buy’ rating with a target price of 70p, said: ‘Foxtons continues to benefit from the recovery of the London sales market, where the sales pipeline is 20 per cent ahead of September 2019.
‘After a challenging 12 months, there are signs the lettings market is starting to normalise, with rents now back to pre-pandemic levels.
‘Foxtons remains a geared play on the recovery of the London housing market, with the potential for significant profit growth should transaction volumes return to more normal levels.’