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London-focused estate agent Foxtons has reported its most robust pipeline of agreed home sales since the pre-Brexit era, driven by first-time buyers rushing to complete transactions before impending stamp duty modifications. The company’s shares climbed 6 per cent on Tuesday following the announcement.
The estate agent revealed that the looming April stamp duty deadline catalysed significant sales activity during November and December, resulting in its highest under-offer pipeline opening position since 2016. The company expressed confidence in exceeding market expectations for the year, suggesting its sales division is well-positioned to return to profitability if positive market conditions persist.
Chief Executive Guy Gittins cautioned that prospective buyers who haven’t already secured properties under offer by mid-December face significant challenges in completing purchases before the stamp duty land transfer tax thresholds change. The upcoming modifications will particularly impact first-time buyers, who currently enjoy stamp duty exemption on properties up to £425,000.
The company’s financial performance has been impressive, with adjusted operating profit surging 33 per cent to approximately £19 million for the year ending December, while revenue increased by 11 per cent. A notable 5 per cent rise in lettings revenue, which comprises roughly 65 per cent of group turnover, contributed significantly to these results.
Looking ahead, Gittins anticipates minimal fluctuations in London rents throughout the coming year, following his accurate prediction of market cooling after a period of record-breaking rent increases. The impact of the upcoming stamp duty changes is expected to be less severe than the previous stamp duty holiday during the pandemic, primarily due to smaller available savings.
The company’s positive trajectory reflects broader market adaptations, with buyers becoming more accustomed to higher mortgage rates and maintaining optimism about potential rate reductions in the coming year. Foxtons is scheduled to present its final results on 5th March.
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