Foxtons reports strong trading as Londoners move out

Foxtons said it made a good start to 2021 helped by a busy London property market as the estate agent chain reported a narrower annual loss.

Pretax loss for the year to the end of December was £1.4m compared with £8.8m a year earlier as revenue dropped to £93.5m from £106.9m. Adjusted operating profit was £1.9m compared with a loss of £0.7m in 2019 as cost cuts offset reduced revenue.

The London-focused group's business was hit by the first Covid-19 lockdown, which effectively shut the UK property market. But trading rebounded in the second half as Chancellor Rishi Sunak's stamp duty holiday prompted a frenzy of buying.

The mini-boom was supported by households moving out of cities to take advantage of working from home in the post-pandemic world. Londoners have been heading for the home counties and coastal towns to buy bigger, sometimes cheaper houses.

Foxtons said after profitability recovered in the second half its financial performance continued to improve in 2021. Revenue in the first two months was well ahead of the same period in 2020 and 2019 and cost control had led to significant profit growth.

"The sales commission pipeline started 2021 more than 30% higher than prior year and has led to much improved revenue growth in the first two months of the year," Foxtons said. "Despite the significant increase in units sold to date, the value of the pipeline has remained stable over this period at levels last seen in early 2017."

Foxtons shares rose 2% to 60.2p at 08:32 GMT.

A glut of rental properties in London has pushed average rents down 12% in 2021 from a year earlier but average commissions have held up as tenants have sought to lock in lower prices, Foxtons said.

Sunak had set a 31 March deadline for the end of his stamp duty holiday, which scrapped the tax on the first £500,000 of a purchase. At his budget on 3 March he extended the deadline for three months to allow a logjam of transactions to ease and then tapered the reduction for another three months.

Foxtons said the budget "brought more certainty for our customers" and that the government's vaccination programme would support higher volumes in residential sales.