Estate agency Foxtons targets commuter towns in drive for growth
London’s biggest estate agency, Foxtons, expects ever-rising demand for rental homes in and near the capital to help it double its profit in the medium term.
The sales and lettings agency outlined plans to double its profit to £50m over the medium term by acquiring estate agents in commuter towns, integrating AI, and enhancing consumer loyalty.
Chief executive Guy Gittins has been vocal about his desire to push growth at Foxtons, overseeing its return to the top spot in London’s letting market last year.
Foxtons had more sales agreed in London compared to any other agent and ranked as the capital’s largest estate agent last year, according to industry source Twentyci.
The company grew its market share by 20 per cent last year, an achievement largely driven by technological prowess and commitment to growing its pipeline of properties.
Operating in the London market has also helped it to turbo-charge growth versus peers: the surfeit of renters from the UK and abroad looking for homes in the capital, plus rising costs, has pushed rents up by more than a third since 2020.
Foxtons profits from London’s rental demand
Londoners now spend around half of their income on rent, a figure that is steadily increasing as average rent rises outstripping wage increases.
In 2023, Savills warned that Londoners would hit their “affordability ceiling” on rents this year, with rental growth unlikely to slow due to the imbalance between supply and demand.
Director of fellow estate agents Benham and Reeves, Marc von Grundherr, said that the market is “fiercely competitive”.
“It’s not unusual for us to see properties let before they’ve even reached the market, with multiple tenants fighting it out and offering to pay larger deposits, multiple months rent upfront, or even higher asking rents in order to secure a home,” he added.
As London becomes ever-more expensive, renters are being forced to move further out of the capital to commuter towns.
While outer boroughs – or towns further afield like Reading – still have cheaper rents than boroughs like Hackney or Lambeth, rents are rising quickly.
Commuter towns have been further boosted by the arrival of transport links like the Elizabeth line, which has made Reading accessible to central London.
This is something Foxtons has taken advantage of: last year, it acquired two small estate agencies in Reading and Watford.
At the end of February 2025, it also acquired Marshall Vizard, another lettings business in Watford.
Its plan to continue its expansion into “new, high value commuter markets” is a core pillar of its profit strategy, in addition to focusing on on “bolt-on acquisition opportunities” within its core – and equally resilient – London market.
Private landlords are leaving the market
In addition to high demand, London and its surrounding rental markets are facing significant supply constraints.
Last month, the UK’s biggest landlord, Grainger, warned that supply wasn’t nearly enough to match demand, and creeping regulation was even causing small landlords to leave the sector.
The Renters’ Rights Bill, which will come into force later this year, will further increase the complexity and cost associated with being a landlord, particularly a private one.
Grainger pointed out that while the new Renters’ Rights Bill will “professionalise the rental market and raise standards”, smaller landlords will “find the new regime challenging and will therefore accelerate their exit from the market, further constraining supply”.
More stringent energy requirements, too, mean landlords will either have to invest thousands in upgrading their properties or sell up.
There have been a number of solutions touted – build to rent among them – but even with a boost in investment, these won’t take effect for a number of years.
“Any significant increase in stock in the sector will be delayed until [beyond 2026] when interest rates have fallen more substantially,” Emily Williams, director in the Savills residential research team, said.