Foxtons Says New Tenant Rules Have Cut Revenue By £5.7 Million

What happened

Foxtons said new renter protections are squeezing income as more tenants exited agreements before their end dates. The company's lettings line fell by £2.3 million in the third quarter, a decline it tied to early terminations under the Renters Rights Act. That adds to the £3 million reduction reported at the half year in July after the measures began in May, bringing the total drag to £5.7 million.

The wider revenue picture

The pressure was not limited to renting. Foxtons said a weaker market for home sales also weighed on performance, and group revenue for the third quarter decreased by £3.1 million, a 6% drop from a year earlier. Across the lettings business, revenue over the first nine months was 3% below the prior period.

The policy and the pushback

Brought in after Labour's 2024 election win, the Renters Rights Act targets so-called no-fault evictions and gives tenants more room to contest steep rent hikes, a notable shift as many struggle to get on the property ladder. Opponents warned it could lead to a rise in dubious disputes and make removing problem tenants more difficult. Even so, Chief Executive Guy Gittins said he expects "longer-term benefits from the Renters Rights Act, notwithstanding some short-term volatility."

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Why it matters to your portfolio

Policy changes can reroute cash flows faster than a renovation. Foxtons now pegs the Act's revenue drag at £5.7 million; lettings are 3% lower year to date and overall Q3 revenue fell 6%, and in early London trading the shares rose as high as 2.36%. The bottom line: rental rules are reshaping agency economics in real time, and stocks exposed to UK lettings are adjusting to that new rulebook.

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