Estate agency Foxtons says ‘government-driven’ costs harming bottom line
Leading estate agency Foxtons has hit out at the “strain” caused by national insurance and minimum wage hikes as it contends with a “challenging” market.
The firm said “government-driven” pressures are harming its bottom line, as revenue growth was “offset” by increased external costs.
The Labour government is facing increasing pressure from business to address the barriers to hiring posed by its increases to minimum wages and national insurance contributions, as well as its workers’ rights reforms.
Foxtons Chairman Nigel Rich said: “The business […] faced a marked increase in external cost pressures, including increased National Living Wage and employers’ National Insurance contributions, which added further strain to the operating environment.”
Rising wages have been blamed by some for rising joblessness, as minimum pay for 21 to 22-year-olds has risen by 33 per cent over the past three years, bringing it into line with the £12.71 hourly national living wage paid to older workers.
The rate for 18 to 20-year-olds has increased by 46 per cent to £10 an hour and is set to rise again to £10.85 in April.
The number of young people not in education, employment or training is nearing one million, according to the Office for National Statistics (ONS).
Rich called on the government to stay out of the way of business, saying: “Delivering [growth] effectively will require a stable operating environment with fewer government policy disruptions.
“A clear and consistent policy framework is essential for consumer confidence and the effective functioning of the property market.”
Asda boss Allan Leighton said on Wednesday the government is becoming “more and more difficult” for businesses to deal with, while the chief executive of baker chain Greggs warned this week she is concerned by high numbers of youth unemployment.
Industry ‘challenging’ as sector blames Budget
Despite cost pressures Foxtons managed a “resilient” performance, its accounts claim, with profit before tax falling by three per cent to £16.9m while revenue grew by five per cent to £172.5m in the year to December 2025.
The group, which is listed on the FTSE all-share, saw a 14 per cent increase in net free cash flow and maintained its total dividend per share at 1.17p.
Estate agents face a “challenging” London market because buyer demand is held back by weak consumer confidence, caused in part by “prolonged speculation” ahead of last year’s budget, the report said.
Foxtons joins a number of leading players in the housing sector in blaming the swirling rumours around last year’s delayed Budget for a stagnant housing market.
Labour has pledged to build 1.5m homes by the next general election but was warned by a leading construction trade body this aim will fail unless the government offers emergency support to ease the sector’s tax burden.