Reporting its Q3 results, Foxtons noted that during Q3 2023 the company’s revenue from financial services, generated by its Alexander Hall brand, was £2.4m. In the previous year to date, commissions were £6.6m.
Repeat refinancing activity continued to underpin the group’s revenue.
Higher levels of lower-value product transfer business were received in Q3, which impacted average commission levels. However, the group said this was largely offset by increased mortgage adviser productivity as operation upgrades took effect.
As house purchase volumes improve, Foxtons expects further new business growth.
Positive signs of improved activity emerged from the Bank of England last month, when it reported that mortgage approvals for purchases reached their highest level in August for two years.
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Meanwhile, rising numbers of homeowners put their properties up for sale over the summer as sale instructions per estate agency branch rose by 40% between July and August, increasing from 10 new listings to 14, according to Propertymark.
House sales drive growth
Total revenue in Q3 was up 8% year-on-year from £43.9m to £47.4m, driven by commissions from house sales.
Income from house sales rose 36% year-on-year in Q3, from £9.9m to £13.5m.
Comparing year-to-date periods, Foxtons’ revenue from house sale receipts grew 31%, from £26.9m to £35.1m.
Q4 ‘optimism’
Guy Gittins, the firm’s chief executive, said: “Continued market share growth, enabled by a focus on improving training, negotiator tenure, culture and our data and technology capabilities, and supported by early signs of market recovery, drove Q3 sales revenue up 36%.
“This growth was supported by a resilient performance in lettings, which continues to provide a valuable stream of recurring and non-cyclical revenues.”
Gittins said that the group entered the final quarter with “optimism”, with a sales agreed pipeline 23% higher than this time last year and the continuing recovery of sales volumes.
He added: “We are on track to deliver increased profitability in 2024, in line with consensus, and we continue to make progress towards our medium-term target of £25m-30m adjusted operating profit.”
