Homebuyer stamp duty rush boosting Foxtons earnings
In the initial months of 2025, Foxtons, the London-based real estate agency, recorded a substantial surge in revenue. Why? Homebuyers hurried to finalize their purchases before the looming April stamp duty changes took effect.
At a recent shareholders meeting, Foxtons reported a season high in quarterly sales revenue since before the 2016 Brexit vote. Sales shot up by a whopping 24 percent. The impending changes in stamp duty for first-time buyers and affordable homes in London had set off a buying frenzy, spurring buyers to expedite their purchases.
Ending temporary tax incentives for these specific housing segments on the 31st of March directly fueled this urgency. Foxtons stated that the rush to close transactions before the deadline had swollen their sales pipeline by approximately 10 percent as they entered the second quarter.
Guy Gittins, the group's CEO, affirmed, "Despite ongoing market volatility, our market leadership position and resilient business model will enable us to continue driving growth this year."
For the three-month period ending March 31st, group revenues stood at £44.1million, marking a hefty 73 percent gain in sales revenue and a modest 5 percent increase in letting revenue.
Sales revenue reached a dizzying £16.4million, buoyed by a £5.6million lift in like-for-like sales and an additional £1.3million from 2024 acquisitions.
Gittins also commented on the lettings sector's performance, stating, "We delivered another robust performance in lettings, with revenues up 5 percent, boosted by contributions from new offices in Watford and Reading."
Looking ahead, Foxtons expects their sales pipeline to recover over the second quarter, as higher and faster interest rate reductions will likely entice more buyers into the market, providing an opportunity for an accelerated growth spurt.
Foxtons shares rose 1.28 percent or 0.73p to 58.03p on the day, marking a 6 percent increase in the past year.
Adam Vettese, a market analyst at eToro, recognized the positive sales surge, attributing it to increased buyer activity in anticipation of the stamp duty increase. Vettese noted, "Despite house prices being at record highs in the UK, buyers seem unfazed and continue rushing to beat the April stamp duty hike. This has contributed to Foxtons' exceptional 24 percent revenue growth."
He explained that the trajectory of further interest rate reductions would play a crucial role in gauging the market's future dynamics, stating, "Shares have seen modest gains today, with investors watching closely to see if Foxtons can reclaim the levels seen at the start of the year, although it's still quite far from historical highs."
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Sources:
- Financial Times
- The Guardian
- Nationwide
- Office for National Statistics
- With their property sales experiencing a significant surge due to homebuyers rushing to beat the 2025 stamp duty deadline, Foxtons is likely to benefit from investing in mortgages in the coming quarters.
- As Foxtons continues to capitalize on the heightened buyer activity, personal-finance enthusiasts may consider investing in this London-based real-estate business as part of their overall investment strategy.
- The outstanding performance of Foxtons in the first quarter of 2025, with a 24 percent increase in sales revenue, could serve as an example for other businesses within the real-estate sector to emulate their strategies for managing the Brexit uncertainties.
- As Foxtons anticipates a recovery of their sales pipeline over the second quarter, finance professionals should monitor the trajectory of interest rate reductions to determine the likelihood of further growth in the business and the wider real-estate market.
- As stamp duty changes are driving an influx of first-time buyers and increasing demand for affordable homes, investors are advised to closely follow the trends in the property market to identify potential opportunities for investing in properties, mortgages, and real-estate companies like Foxtons.
- To successfully venture into the real-estate investment scene, individuals might want to consider using online DIY investing platforms such as AJ Bell, interactive investor, InvestEngine, and Trading 212 to gain access to a wide range of investment options within the real-estate sector.
