If you’re looking to invest in the UK property market, you can’t ignore Foxtons. The London-based estate agent, known for its bright green and yellow Minis, is proving to be a force to be reckoned with, despite the challenging market conditions.

Foxtons recently released its first-half results, showcasing a significant turnaround in its fortunes. Here’s a quick look at the key numbers:

• Revenue: Up 11%
• Pre-tax profits: Up 24%

These figures clearly show that Foxtons is doing something right, and CEO Guy Gittens is justifiably proud of his team’s performance.

The Secret Sauce – Talent and Culture

One key factor behind Foxtons’ success is its ability to attract and retain top talent. The company boasts a “work hard, play hard” culture with generous rewards for its high-performing employees. While this approach might not suit everyone, it’s clearly working for Foxtons, as evidenced by the 6% increase in average revenue per fee earner and a 15% rise in revenue per branch.

A Look At The Broader Market

While Foxtons is thriving, the broader UK property market is facing headwinds. The recent Halifax House Price Index revealed that while prices are rising in the North, they’re relatively stagnant in the South and London, where Foxtons is dominant.

The main culprit is affordability. London property prices are sky-high, with the average house costing over half a million pounds. Coupled with rising mortgage rates, this has put a dampener on buyer activity.

The Bank of England’s Role

The Bank of England’s upcoming interest rate decision on Thursday is crucial. While a rate cut might not directly impact fixed mortgage rates, it could still lead to more competitive deals.

The City is optimistic about a rate cut, but the Monetary Policy Committee (MPC) has been sending mixed signals. Regardless of what happens, it’s unlikely to please everyone, especially in a market as volatile as this.

The Rental Market – Another Boost for Foxtons

Foxtons also has a large rental business, which is a key driver of its success. The demand for rentals is still strong, with Rightmove reporting that properties are receiving an average of 17 enquiries each. This is down from 26 in 2023, but still more than double the number seen in 2019.

The Future of Foxtons

While the UK housing market faces challenges, Foxtons appears to be well positioned for continued success. Its strong performance, coupled with its robust rental business, should enable it to thrive even if the broader market remains sluggish.

If you’re looking to invest in the UK property market, Foxtons is definitely worth keeping an eye on. The company’s strong performance suggests it’s one to watch closely, even if a Bank of England rate cut could further boost its success.