London estate agency Foxtons recorded a noticeable drop in revenue in the third quarter. As the agency announced in its latest trading update, total revenue during this period amounted to £31.1 million. Compared with the prior-year quarter, this represents a decrease of seven per cent, or £2.3 million.
The company considers altered legislative requirements to be the main reason for the weaker revenue. Specifically, Foxtons quantifies the impact of early terminations by tenants at £2.7 million. This sharp rise in early contract terminations is directly linked to the Renters' Rights Act, which came into force on 1 May 2026.
Regulatory shift in the UK rental sector
The reform strengthens tenant rights in the United Kingdom, introducing more flexible options to end existing tenancies early, among other measures. For traditional agencies whose revenue model in the London market relies heavily on transaction fees, agency commissions, and management charges in residential lettings, the new rules have resulted in direct financial losses.
The third-quarter figures illustrate the extent to which regulatory interventions are weighing on operating business. Without the £2.7 million negative effect directly attributable to early terminations, the agency's quarterly revenue would have exceeded the previous year's level.
Key figures for the quarterly results
- —Total third-quarter revenue of £31.1 million
- —Year-on-year revenue decline of 7 per cent, or £2.3 million
- —Revenue shortfall of £2.7 million as a result of early tenant terminations
- —Introduction of the Renters' Rights Act on 1 May 2026 as the key catalyst
For agents and landlords in the London residential market, the changed termination behaviour brings new challenges. While tenants make use of their expanded exit rights, agencies must adjust their revenue models and contract lengths to heightened turnover and reduced planning certainty.
