The green-and-yellow Minis, sharp suits and skiing trips for the top 100 performers are back at Foxtons. Chief executive Guy Gittins started his career at the listed estate agency chain in 2002, and his efforts to rebuild the firm’s database, hire more staff, bring back face-to-face training, offer more incentives and double down on the lettings business seem to be paying off.
He says Foxtons has the largest database in London, with 5.5 million contacts (landlords, tenants, vendors and buyers) and a timeline for every property the firm has ever dealt with. It will use AI tools to predict customer behaviour.
Founded in 1981, Foxtons quickly became a leading player in London, known for its F-emblazoned cars and aggressive sales tactics. It went through rocky times, with branch closures, job cuts and plunging revenues under Gittins’s predecessor Nic Budden. But last October, a year after Gittins took the helm, the company declared it had got its “mojo” back and reestablished its position as London’s No 1 estate agency brand, based on market share and growth of new instructions.
But for some in the capital, it is a brand synonymous with the worst excesses of London’s property crunch: ever more unaffordable housing and pushy estate agents hungry for commission at all costs.
Lettings now make up 70% of group revenues and offer stable income, unlike property sales, which are tied to the economic cycle. Lettings grew by 16% last year, delivering more than £100m revenue for the first time, while sales revenues slid by 14%. Rents, which have soared in recent years, were expected to stabilise and remain at historically elevated levels, Foxtons said last week.
“It’s not healthy for anybody,” says Gittins. “And we absolutely do not welcome 20% rent increases in a year. It’s not good for London, it’s terrible for tenants. The reality is it is a supply and demand imbalance that’s causing that issue.” A year ago, Foxtons wrote to the government asking it to act to encourage landlords back into the sector, after a removal of tax relief on mortgage interest and other measures.
“We’re not seeing a mass exodus of landlords – that’s definitely not happening,” Gittins says. “But we’re not seeing the same volume of new landlords entering the market.”
He sees “some green shoots” for tenants, saying there are 30% more rental properties on the market across all agencies than at this point last year. Unlike some rivals which are predicting further hefty rises in rents (Savills has forecast 6% increases), Gittins estimates it will be between 0 and 2%.
When he was growing up, Gittins says, he was “obsessed with engines and taking things apart, trying to find a way to improve them or make them go faster – when I was in my early teens, I just wanted to be a race engineer”. So he studied engineering at Oxford Brookes University and spent a year with the Mitsubishi World Rally team, where he met businesspeople and wondered: “How did they become so successful?”
That led him to his first job, at Foxtons’s largest branch in South Kensington. He was still living with his parents at the time and had borrowed a suit, tie and shoes for the interview; when he was told he could start the following Monday, he went shopping with his mum to buy his own outfits.
He recalls: “Foxtons, particularly in the early 00s, was known as the cult because we worked and played together.” He soon became the top salesperson, because he got a flat near the office with a parking permit, which meant he could “get an extra hour’s sleep” and “do an extra viewing each day across the entire week” while others were commuting from outside London.
After meeting the property, oil and shipping magnate Peter de Savary through Foxtons, Gittins worked for him abroad on a number of island projects, including a marina and resort village in Grenada in the Caribbean. Four years later, he returned to the UK to launch the luxury apartment block One Hyde Park for the Candy brothers, who racked up more than £2bn in sales from 86 flats.
A 10-year stint at Chestertons – one of the UK’s oldest estate agents, founded in 1805 – followed, where he rose through the ranks from sales director to chief executive and turned the loss-making chain around.
Gittins was brought in by Foxtons’s new chairman, Nigel Rich, after the company came under mounting pressure for a change in leadership from large shareholders including Hosking Partners and Converium Capital. Activist investor Catalist claimed Foxtons had “lost its way”.
Those investors say that Gittins is doing a good job but complain that the company’s share price, while improved, is not reflecting the progress made. Some investors are urging Foxtons to put itself up for sale, pointing to other private equity-backed deals in the sector. (Foxtons has been in private equity ownership before, when founder Jon Hunt sold it to BC Partners in 2007.)
The shares, which floated at 267p in 2013 and reached a peak of 399p in 2014, are changing hands for about 54.9p. But they have risen more than 40% in the last three months.
Django Davidson, portfolio manager at 10% shareholder Hosking Partners, says: “A sale is one way to close this valuation gap – a fact that we’re sure is not lost on the current board.”
Cory Bailey, co-founder of 3G Capital, which also owns 10% of Foxtons, agrees: “It’s going to be hard for Foxtons to become a significant part of the consolidation in the sector unless they’re part of a private equity firm.” He says Foxtons’s lettings book of 30,000 properties in London is a “prime asset”.
Chestertons was recently sold to European real estate services group Emeria, owned by the Swiss private equity firm Partners Group, for a reported £100m.
Gittins dodges the buyout question. “We’re 100% focused on delivering the strategy that we set out, which is to deliver £25m to £30m of adjusted operating profit within the next three years,” compared with £14m last year, he says.
Then again, everyone has a price.
CV
Age 43
Family Married with three children (met his wife at Foxtons when they were in competing offices).
Education First-class degree in engineering and business management at Oxford Brookes University, including a year in industry with a world championship winning motorsport team.
Pay £450,000
Last holiday Christmas ski trip to Westendorf in Austria.
Best advice he’s been given “Hard work beats talent when talent doesn’t work hard.”
Biggest career mistake “When I first started, I thought it was important to fit in … when it was more important to stand out.”
Phrase he overuses “Show me the data!”
How he relaxes Skiing, spending time with family, rally driving in Wales, “negotiating the occasional lie-in to recharge the batteries”.
