Good morning, everyone, and thank you for joining the Foxtons 2025 half-year results presentation. I'm joined by Chris Hough, Group CFO, and we will answer any questions at the end of the call. We have a streamlined presentation today following the in-depth look at the business at our Capital Markets presentation last month. This morning, I'll take you through some of the key financial and operational highlights to provide an update on London's lettings and sales market. Chris will then talk you through the numbers, and I will finish with an update on operational progress in the half, followed by some detail on July trading and outlook for the rest of the year. The business I took over when I rejoined Foxtons in September 2022 was very different to the one we are today.
Following a forensic operational review, we undertook a massive rebuilding exercise over 2023 and 2024 to completely turn around the business, and that work is really paying off. We are now firmly in the next stage of growth, and I could not be more excited about the momentum we're building. That progress can be seen in our results for the first half. We delivered 10% revenue growth and 31% profit growth. Revenue growth was delivered through another half of lettings growth, + 25% growth in sales as the business capitalized on Q1 volumes that were boosted ahead of the statute deadline. Driving margins is a key area of focus, and we delivered profit growth through a focus on higher margin activities, delivering returns from our acquisitions and keeping a tight control on costs without impacting top-line growth.
Following our strategic rebuild over the last three years, today, Foxtons is first and foremost a lettings-focused business. In total, non-cyclical and recurring activities generated two-thirds of revenue in the half, highlighting our totally changed financial profile as we aim to deliver consistent and predictable earnings growth. In the half, we delivered continued market share growth to further cement our position as London's largest estate agency brand and, impressively, for a London-focused business, also as the U.K.'s largest lettings brand. Operationally, although the turnaround stage of our plan is complete, we haven't stood still. The business has really embraced a new culture of continuous improvement, which is key to ensuring that we not only stay ahead of the competition but build a bigger lead over time.
In the half, we delivered further upgrades focused on driving lead generation and conversion, customer service and experience, and further developing our people and culture. I will provide more detail on these later in the presentation. Finally, and excitingly, we held a Capital Markets event last month. On the day, we presented an in-depth look at our business, our enhanced strategy for growth, and set new medium-term financial targets to deliver GBP 240 million in revenue, GBP 50 million in adjusted operating profit, and a 20% adjusted operating profit margin. To give some context, our new profit target is more than double the level delivered last year and really highlights the growth potential that we see in this business. Turning now to slide seven and an update on the London lettings market. On the chart on the left-hand side, we have indexed the tenant demand and property instruction levels to 2021.
As you can see, supply and demand dynamics have now stabilized, following a period of volatility after COVID-19 to a new normalized level. Demand remains high, and although we are seeing more turnover of properties in the lettings market, demand continues to outstrip supply. Reflecting this structural imbalance between supply and demand, rental prices grew 2% in the half, broadly in line with inflation. We expect this dynamic will continue, underpinned by the long-term trends of high levels of demand and limited numbers of new landlords entering the sector. Our industry-leading platform enabled us to maximize our opportunity in the lettings market. We continue to deliver market share growth to further cement our position as London's number one lettings agent.
Our commuter town acquisitions are performing well, and I'm excited by the growth opportunities we can deliver, both acquisitive and organic, by rolling out our brand, technology, and data capabilities in these new markets. On the regulatory front, the government is advancing the Renters’ Rights Bill, and it's expected to take effect in 2026. The new legislation creates opportunities for Foxtons. As London's largest estate agent, we are uniquely positioned to guide landlords through the evolving landscape, leveraging our deep market insights, robust research capabilities, and sophisticated legal and compliance infrastructure. These strengths enable us to turn regulatory change into a competitive advantage. As we discussed in detail during the Capital Markets presentation, today, over half of landlords operate without an agent.
Given the increased levels of regulation, we're seeing an increased number of these landlords now opting to use professional agency services to mitigate the risk of getting it wrong versus a DIY approach. This is a trend that we expect to continue to grow. In addition, the increased regulatory burden enhances the appeal of our value-add property management services. With a concerted effort across the business, including trainings, KPIs, and top-down management, we delivered a 9% increase in our upsell rate in H1 alone, which is a fantastic result that will support further revenue growth in H2. Together, these dynamics are expected to grow the lettings' total addressable market and drive stronger customer lifetime value, supporting delivery of our growth plan. Turning now to slide eight and an update on the London sales market. Exchange volumes were 18% higher than in the prior year, with volumes reflecting two distinct quarters.
Q1 volumes were 50% higher than the prior year, as we saw high numbers of first-time buyers completing transactions ahead of the statute deadline at the end of March. As expected, Q2 volumes were 10% lower, reflecting the pull forward of deals into Q1. At Foxtons, we're focused on volume markets, characterized by properties priced below GBP 1 million, which is where the bulk of London's property transactions are completed. This segment massively outperforms prime and superprime markets, where tax changes coupled with high levels of stamp duty have disproportionately impacted demand from wealthy and international buyers. In fact, despite the overall London market seeing growth in volumes and exchanges, these markets were year-on-year lower. This dynamic reinforces our strategic focus on the more resilient volume market within London and beyond.
Looking further ahead, one dynamic to highlight is demand has not grown at the levels that we and most of the industry expected at the end of last year. The primary driver here is borrowing costs, which have not reduced at the rate initially forecast. In fact, borrowing costs are broadly unchanged versus last year. Compounding this is a general weakening in consumer confidence, the economic outlook, and uncertainty ahead of the Autumn Statement. The pace of interest rate cuts will be key in determining how demand evolves over H2. For vendors looking to sell in this environment, pricing is absolutely key. There are high levels of pent-up demand in the market, and where we see properties priced competitively, buyer interest and offer rates remain strong. We welcome the government's recent announcement of the new mortgage guarantee scheme and await further detail.
More pressingly, in my opinion, is a review of stamp duty. Q1 demonstrates just how much stamp duty impacts the market, and I'm firmly of the belief that stamp duty needs reforming across all price points to allow people not just to buy their first property but create the market's liquidity that allows homeowners to either upsize or downsize as their needs evolve. A healthy, functioning, and affordable sales market is critical in supporting the government's growth agenda. I'll now pass over to Chris Hough for a run through the financials.
Thank you, Guy, and good morning, everyone. In the first half, the group delivered strong revenue and adjusted operating profit growth as we continue to progress against our growth plan. Financial highlights are set out on slide 10. Group revenue grew GBP 7.6 million, or 10%, to GBP 86.1 million, with Sales contributing 70% of the revenue growth as we capitalized on a buoyant Q1 Sales market, and Lettings contributing 30% of the revenue growth. We delivered GBP 12.3 million of adjusted operating profit, which is 31% higher than the prior period. Consistent with the full year 2024, adjusted operating profit for the half excludes amortization of acquired intangibles, with the prior period comparatives restated to provide a fair comparison across financial years. Our adjusted operating profit margin grew by 230 basis points to 14.3% as operational initiatives and the inherent operating leverage in the business growth.
I'll provide more detail on these initiatives in the segmental overviews. Adjusted EBITDA, which is defined on the same basis to calculate the group's RCF covenants, grew by 32% to GBP 13.8 million. Actual profit before tax was GBP 10.2 million, up 35% on the prior period. Net free cash flow was positive at GBP 3.6 million compared to a GBP 0.9 million outflow in the prior period, reflecting improved profitability and a lower working capital outflow. The board has declared an interim dividend of GBP 0.0024 per share, a 9% increase on the prior period under the group's progressive dividend policy. The group also bought back GBP 2.8 million of shares in the first half under the buyback program announced for April this year. Turning now to slide 11, which provides an overview of the income statement and key changes.
The 10% increase in group revenue to GBP 86.1 million reflected 4% growth in Lettings revenue, 25% growth in Sales revenue, and flat Financial Services revenue. I'll talk to the key revenue dynamics in each business over the next three slides. Group revenue continues to be underpinned by Lettings, which represented 63% of group revenue in the half. As highlighted at the Capital Markets event, Lettings revenue is non-cyclical and recurring in nature and delivers high levels of consistency and earnings visibility. Direct costs were up GBP 2.6 million, reflecting higher fee earner numbers as a result of acquisitions and higher revenue-linked staff commissions. Contribution margin was held flat at 65%. Overheads were GBP 1.4 million higher, primarily driven by GBP 1 million of incremental overheads relating to acquisitions.
The underlying cost base was broadly flat despite inflationary headwinds and GBP 0.5 million of higher national insurance costs in the period as part of our focus on driving margin growth. Depreciation, amortization of non-acquired intangibles, and share-based payments were GBP 0.8 million higher than the prior period. Together, these movements delivered adjusted operating profit of GBP 12.3 million, a 31% increase on the prior period. Profit before tax was GBP 10.2 million, which is GBP 2.7 million higher than the prior period. In the first half, we also delivered on a material future cost-saving program by negotiating an early exit from the Chiswick Park headquarters lease and agreeing a new lease for a smaller space in order to right-size our headquarters footprint. This proactive move has been enabled by the better use of branch space and growing our lower-cost property management center outside London.
The right size will result in cost savings of approximately GBP 1.5 million per year from January next year. No early exit agreement is payable under the terms of the surrender. The Chiswick Park right size is part of a wider program to deliver cost savings in the property portfolio without impacting revenue generation capabilities. Including the saving on the Chiswick Park lease, the group's 2026 underlying lease cost base will be approximately 20% lower than 2023 as a result of right-sizing, consolidating branches, and successful lease renewal negotiations. Turning now to slide 12 and performance in lettings. Lettings revenue grew by GBP 2.2 million, or 4%, to GBP 54.6 million.
This is a result of GBP 2.9 million of incremental revenues from lettings acquisitions, broadly flat like-for-like lettings revenue, which reflects strong property management revenue growth offset by lower like-for-like transaction volumes, primarily driven by phasing, and GBP 0.5 million lower interest to earn on client monies due to lower Bank of England interest rates. Overall, transaction volumes grew 2% and revenue per transaction increased by 3%, reflecting 2% higher rental prices and improved revenues from property management, supported by a 9% increase in like-for-like upsell versus last year. This is in order to grow our portfolio of non-cyclical earnings and to drive customer lifetime value. Contribution grew 6% to GBP 41.5 million off the back of revenue growth, whilst the contribution margin grew by 90 basis points, which is primarily due to margin accretive property management and cross-sale of related ancillary services.
Adjusted operating profit grew 13% to GBP 15.5 million, and adjusted operating profit margin grew 210 basis points to 28.4%, reflecting the stronger contribution margin and the delivery of acquisition-related synergies. Moving to slide 13 and an update on the Sales business. Sales revenue grew GBP 5.3 million, or 25%, reflecting GBP 3.1 million of like-for-like revenue growth and GBP 2.2 million of incremental revenue from our commuter town acquisitions. In total, volumes were 44% higher and revenue per transaction was 14% lower. On a like-for-like basis, excluding the commuter town acquisitions, revenue was 14% higher, reflecting 21% growth in transaction volumes as we effectively capitalized on a buoyant Q1 market driven by a 31 March stamp duty deadline and 6% reduction in average revenue per transaction due to a higher proportion of lower-value first-time buyer properties transacting in Q1 ahead of the stamp duty deadline.
H1 2025 market share across Foxtons London markets was robust at 5%, ahead of the 4.5% target set out in March 2023. The adjusted operating loss in Sales narrowed to GBP 2.1 million and an improvement of 42%, reflecting higher revenues, improved productivity, and a profitable contribution from the new commuter town acquisitions. Moving on to slide 14 and Financial Services. Revenue in Financial Services was flat compared to the prior period as good growth in new purchase activity was offset by lower refinance revenue due to timing of mortgage renewals. Specifically, new purchase mortgage revenue was up 22%, with Q1 benefiting from particularly strong year-on-year growth, and refinance revenue was down 19%, driven by the timing of mortgage expires, which are weighted towards H2. Average revenue per transaction was up 4%, driven by growth in higher revenue new purchase activity.
This was offset by a 4% reduction in volumes, reflecting lower refinance expires. Adjusted operating profit was low in the half, primarily reflecting investment in fee earner headcount, up 8% year-on-year as we scale up the business. New fee earners typically break even around the 12-month mark. Moving now to slide 15 and cash flow. There was a GBP 3.6 million net free cash inflow in the period, reflecting improved profitability and a lower working capital outflow. The operating cash-to-net free cash flow bridge on the left-hand side shows the items of note. Operating cash before working capital movements was positive at GBP 19.2 million, 16% higher than the prior period. There was a GBP 6.5 million seasonal working capital outflow.
The group also paid GBP 0.8 million of corporation tax and made GBP 6.9 million of lease liability payments in the period, and GBP 1.4 million of cash was used in investing activities, primarily relating to branch fit-out CapEx and internally generated software development. Looking at the opening to closing net cash bridge on the right-hand side, we started the year with GBP 12.7 million of net debt and ended the half with GBP 18.2 million of net debt. This reflects GBP 3.6 million net free cash inflow, GBP 3.1 million of acquisition consideration paid, primarily relating to the acquisition of Marshall Vizard in February, and GBP 5.7 million of total shareholder returns, which includes GBP 2.9 million of dividends paid and GBP 2.8 million of share buybacks. In the year, we successfully extended the RCF by 12 months to June 2028. The interest cover and leverage covenants have remained unchanged.
At 30th of June, the leverage ratio was 0.7x , comfortably below our limit of 1.75x , and the interest cover ratio was 27x , comfortably above our limit of 4x . Finally, we have declared an interim dividend of GBP 0.24 per share, a 9% increase on the prior period under the group's progressive dividend policy. I'll now hand back to Guy, who will provide an operational update.
Thank you, Chris. As we've demonstrated over our recent results calls and at the Capital Markets presentation, our operating platform is highly sophisticated, industry-leading, and a key differentiator allowing us to drive a level of growth unheard of for an agent of our size. Before my return, the once game-changing platform hadn't evolved, with new products and improvements put on hold and high levels of tech debt building up. Over the last two years, the platform has been comprehensively rebuilt, and we're once again developing and bringing to market new innovative products to drive our performance forward. I frequently challenge not just my Senior Leadership Team, but everyone across the company to always find ways of innovating and work better to deliver superior customer outcomes.
In fact, innovation is one of the core values that underpins our culture, and this approach is really helping us deliver a culture of continuous improvement. By always ensuring that we're driving the capabilities of our own platform forward, we'll not only maintain our competitive advantage but create even more distance between us and the competition. Improvements to the platform this half were focused on the group-level growth enablers that we presented last month, namely lead generation and conversion, customer experience and lifetime value, and our people and culture. We continue to roll out new technology solutions to enhance the customer experience. Our real-time feedback system is now enabled across every stage of the customer journey and delivering incredibly valuable insights, which is unique in our industry. This is now supported by an AI-powered sentiment analysis system, which uses natural language processing to measure the customer sentiment at every interaction.
This system highlights our strategy of investing in AI products where they can show a high ROI and make a meaningful operational difference. We can now scientifically identify what drives our customer satisfaction, tailor our service approach, and identify training needs instantly. Crucially, we're using these insights to re-engineer processes and incentivize service delivery to deliver exceptional service that drives customer retention and lifetime value. To support lead generation and conversion, we've totally re-engineered and launched a new version of our customer website. Our website is totally unique for the level of traffic that it generates in the sector, ranking only below the aggregators and significantly ahead of all other agents, including the largest national chains. As Foxtons' largest source of lead, the new site will play a key role in driving growth. The codebase has been totally modernized, making the platform more robust, flexible, and future-fit.
Customer experience and functionality have been significantly upgraded, including a full redesign of My Foxtons portal based on customer feedback. Pleasingly, we're already seeing stronger digital engagement and higher satisfaction levels, with further future enhancements planned over time. Moving now to a hub and spoke model. As Chris Hough mentioned earlier, I'm really pleased that after several years of review, we can significantly reduce our HQ lease cost as we move into a new space. Having been in our current building for over 20 years, this gives us a chance to create a new modern office setup without impacting the culture of our HQ, a culture and level of energy that many of you will have experienced on your visits over the last two years. The HQ right-sizing is part of a wider branch optimization program.
We've forensically reviewed our branch requirements over the last two years, reducing costs without impacting the ability to serve our customers or deliver growth. These savings are part of a wider labor focus on costs, and tightly managing the cost base without impacting top-line growth is a key lever in delivering our profit and margin targets. Moving now to our acquisition strategy. At the Capital Markets presentation, we outlined our enhanced strategy to rapidly expand into and consolidate within high-value commuter markets, and in doing so, rapidly win market leadership. We term this our buy, build, and bolt-on strategy. In H1, we made further progress against this strategy. Firstly, we integrated Watford-based Imagine Properties into the operating platform. The business has been rebranded to Foxtons and is already leveraging the platform's capabilities in lead generation, delivering a massive 60% increase in the share of new sales instructions.
To support the business further, we've rapidly completed the bolt-on acquisition of the third largest lettings agent in the area in February. Today, Foxtons is the number one agent by some distance in this valuable market, an achievement delivered in just under 12 months, highlighting our ability to rapidly consolidate markets, deliver recurring lettings revenue, and turbocharge returns with organic growth. We have a good pipeline of opportunities, and aided by comprehensive market and agent analysis, our acquisitions team are identifying and forcing off-market deals to drive our acquisition strategy forward. Moving now to the most important part of our business, our people and culture. It is my fundamental belief that the estate agency is a people business. Having the right talents, developing great leaders, and embedding and really demonstrating our core values is critical to our success.
As part of our continuous improvement drive, we've worked with external advisors to understand how we can build on our strengths and ensure that we are always driving our culture forwards. Key upgrades delivered in H1 include further embedding our company values, delivering enhanced training to strengthen our culture, and ensuring that we have the right people data and management metrics across the business. We are seeing good progress with fee earner productivity and revenue per fee earner, both growing in the half. Finally, to slide 19 and an outlook for the rest of the year. Lettings is displaying good momentum, benefiting from the seasonal uplift of summer, building on the instruction market share growth delivered in H1. More generally, with healthy stock levels, strong tenant demand, and inflation imprint, the market will continue to deliver consistent and predictable returns. Further strategic acquisitions will enhance the returns here.
In contrast, the pace of growth in Sales has moderated versus the industry's expectations at the beginning of the year. As mentioned, the key driver is borrowing costs, which have remained at elevated levels for longer than anticipated. Weakness in consumer confidence, economic outlook, and uncertainty ahead of the autumn statement are compounding this. The pace of any interest rate reductions will be the key factor in determining how quickly demand grows, with market commentators forecasting a rate drop in August. Financial Services revenues are expected to remain resilient. Refinance activity is expected to see good growth in H2, driven by the volume of mortgage terms expiring, whilst demand for new purchase mortgages will reflect Sales market trends. Despite the wider macroeconomic uncertainty, our financial profile is strong, underpinned by stable and recurring earnings from lettings, giving confidence in our ability to deliver our growth strategy.
That concludes our formal presentation. Thank you all for joining us today. Chris and I look forward to meeting with many of you in the coming weeks, and I'll now pass back to the operator for any questions that you may have.
Your first telephone question today is from Greg Poulton from Singer Capital Markets. Please go ahead.
Yeah, morning, Guy, Chris. Just a couple from the APs. Could you talk a bit about the depth of the M&A pipeline, and how active that is, please? Could you also talk about M&A pricing and whether you've seen a change in valuation aspirations as a result of the weaker sales market post Q1? Please, thank you.
Hey, morning, Greg. Guy here. Great to hear from you. As you may remember, we have an internal acquisitions team who focus every single day on two things. They're constantly reaching out to independently owned agents across the south-east of England. We're, as you know, looking out for these larger commuter town locations, as well as trying to infill within the M25. We have a really strict investment criteria. We're looking not just to spend any money. We're looking to make the right acquisitions. We use data to lead all of the decisions about where we want to be. Generally, if it's outside of London, that would be a formula of volume and value, and making sure that collectively we want to try to buy in to become, over the first second, a market leader within the lettings space.
That's an always-on strategy, and the team is doing a great job. We're always talking to lots of people, and we've got a meaningful pipeline that we're looking to transact with at any time, and some people that we're looking to transact with this year as well. Of course, timing is always critical with these acquisitions, but we're pleased with the state of the current pipeline. The people that we're talking to, and Chris might want to talk about the actual north poles of the values that we're seeing for these. They're very stable. Very stable, I'd say, year over year, Greg. Similar position we talked to at the Capital Markets today. Looking forward to reporting progress as soon as we can in the second half.
Thanks, guys.
The next question comes from Andy Murphy from Edison Group. Please go ahead.
Two questions, please. First of all, can you just remind us about the size of the share buyback program and how much of it you might be planning to spend in the second half? Secondly, more to a broader question. Just thinking about your M&A in the commuter towns so far, I'm just wondering what lessons you've learned from the deals that you've done and how that has shaped your thinking in terms of the pace, type of business that you're looking for, location, etc.
Morning, Andy. I'll pick up the share buyback question if that's okay. In the first half, we spent GBP 2.8 million in cash, and that was linked to the program we announced in April, and that program was GBP 3 million. We're substantially through that program. In terms of closing that out, we'll continue to monitor that in the second half. As for new programs, that's very much monitored on a very regular basis by the board as part of the capital allocation framework. I'm going to pick up the question around the commuter towns and how some of the progress feeds, I'm thinking, in acquisitions. Yeah, absolutely. Thanks for your question, Andy.
Look, we think the biggest lesson that we've learned is that there's a fantastic opportunity out there, particularly when we take the Foxtons operating platform, the momentum, our obsession with data, and what we can do with historic data to really drive organic performance, as well as seeing internal improvements from things like productivity once we bring the new business onto the platform. A great example of this is our recently acquired Watford business called Imagine. They had three or four offices in and outside of Watford. We made that acquisition at the end of last year. Quickly after making this, we actually rebranded entirely to Foxtons. We brought them straight onto our Foxtons BOSS system, as you know, which is the most powerful in the industry.
Not only did we see an uplift in their productivity internally, but because of the way that we're able to farm data and really accelerate that market share focus, we took all of that historic data and put it into the Foxtons market share internal AI-driven platform. We've seen a huge growth, particularly in, for example, the sales market share, which has grown, I think, faster than we could even have hoped when we made the acquisition. I think it highlights the opportunity, and beyond that, it also helps us really define what the buy and build strategy looks like with the bolt-on, as Chris mentioned in his piece.
Beyond the Watford Imagine business, very shortly after we made the acquisition, we also purchased a business called Marshall Vizard, which in the first quarter of this year, that was a smaller business, but we were able to bolt it straight into Watford. We took great synergies out of that, brought the team across, and we've looked after them, and they're doing a great job, really making sure that we're pushing on and trying to focus on these opportunities as quickly as possible where we know the Foxtons brand, the Foxtons price point matches this volume and value market that we can find in these higher-value commuter belt town locations. It's always about people as well.
We've been really pleased with the quality of individuals that have come across from these businesses and how quickly they've incorporated and really become part of the team and become part of the region that they're joining. We're really excited about it. If anything, we're even more profound than we were this time last year.
Ladies and gentlemen, if you would like to ask a question from the phone, please press the star followed by one on your telephone. We have no more questions from the phone. I would now like to turn the conference back over to the speakers for any questions from the webcast, if any.
Thank you. We have a couple of questions on the web, so I'll read those out. First of all, from Robin Savage at Zeus, Robin's asked us if you can provide some more color around our Foxtons lettings market share growth, which we mentioned in the release, particularly in terms of share of stock of lettings, share of total rents. Guy, that might be for you to sort it.
Sure. Yeah, and morning, Robin. Thanks for your question. I think we're really in a great position here with lettings market share growth. A lot of that is organic. Of course, it's also turbocharged by the acquisitions that we're making from years ago, and we're bringing all of this data into the main platform. Of course, we're benefiting from the continued investment into our platform, particularly around the prospecting team that we have here at Chiswick Park, 90 people that are using a state-of-the-art AI-driven platform that looks at our 4.5 million contacts that we generated and built up over the last 25 years. The AI functionality really helps us propensity model those contacts so that we can focus on calling higher likely converting individuals and leads over the way that the rest of the industry does it, which is purely sporadic and very much a poison sheet.
What that means is that we've seen a huge improvement in the outputs of our prospecting team. To put this into context, the old way of doing things, we might have been making circa 35 calls per valuation book from the team, and that's now, depending on the region, as low as 10 or 11 calls per valuation book. That's a really great example of where AI has helped improve productivity. One of the only things that needs to get better as a machine is learning, and as we're optimizing the algorithms and other things. Brilliant growth of our market share, particularly if you look before I joined, you know our market share for lettings was, say, somewhere between 4.5% to maybe 4.9%. We've driven that today somewhere between 6% and 7%, depending on how you define our perception. That really is massively market leading.
We're really pleased to see continued growth in that. If you look at the Built-to-Rent, obviously, we've been in the Built-to-Rent sector far longer than the majority of London estate agents. Today, we are the number one agent for London leasing partners. We know that we've got larger volumes of these BTR units coming to market over the next 24 months. That's because we've built great relationships with the developers and with the Built-to-Rent clients. I think we deliver great advice because we have more data in the lettings market right the way across London. I think our position is very much valued when we come to really talk about what's happening in the London market. Nobody has a better view on that to be able to advise accordingly. Ultimately, the best performance. We've got the largest team of lettings experts across London.
We've got, as you know, we register well over half a million tenants, over half a million tenant inquiries a year. That means that through the sophisticated system that we've built, we're able to place more of those individuals appropriately into Built-to-Rent schemes. It's a continued long-term growth area for us. We're constantly looking at ways that we can, the way I describe this is industrializing the BTR operation for our teams here so that we can really scale up and continue to fill what is a meaningfully large volume of units that will be coming to market in the foreseeable future.
We've got one more question on the web. This is from Chris Millington at Deutsche Numis. It's a three-part question. We'll start with the first part. Chris here asked around front-end demand indicators in Sales and Lettings through July. Guys, you can pick up that.
Yeah, sure. Okay, I'm very happy to talk about that. We saw, as you can expect and as is certainly forecast, a very, very buoyant start to the year in Q1, as we were seeing a lot of buyers scrambling to try to make the most of the small stamp duty saving of up to GBP 11,000 for first-time buyers. When that stamp duty holiday was over, as expected, we saw a drop-off in demand quite quickly. Actually, as we got to July particularly, we've seen a divergence of that demand becoming much more in line with prior years. It's improved slightly over what we saw in Q2, but we're not seeing higher demand than we've seen at any other point in the last two or three years. That difference between what we saw in Q2 is definitely getting smaller and becoming closer to what we've seen in previous years.
I think we've got to work really hard to stimulate the market again. We know that it's a very price-sensitive market across London. I spend time in all of the front offices on a Friday, go around and look at and talk to the negotiators. I love getting feedback about what's happening in the market. What are their buyers saying? What are their clients saying? Very much, it's about price today, and it's about buyers looking to value. When prices are correct and in line with where things are trading, we see good demand, and we see these things going on pretty quickly. We're trying to deliver the correct amount of information and data to our clients so that they can understand themselves what's happening and work with our clients to make sure that their properties are priced accordingly, depending upon their own individual requirements.
I think we're working hard to try to make sure that momentum is pulled across now to Q3 and Q4.
Thank you. Part two of the question was around property management and the level of uplift we've seen in recent years. We can probably take that and then link to that as well in lettings, is what level of organic growth could we expect in the second half? I'll briefly go through both of those. In the property management, we really have seen a great level of progress here over four years, some of it driven by organic, some of it driven by M&A, and it's probably around a 50/50 split there between M&A and organic. We're really taking portfolio, Chris, from low 30% penetration all the way up to 40%. Typically, in H1 this year, we have seen another leap forward in that. I've just seen another question come on the web on this topic. I'll probably pass that to Guy in a second.
Just to answer your third question, Chris, your third part, whether around organic growth in H2 in lettings, the answer is yes, I would expect to see growth. Absolutely, that's where we will get the business to be and why we've got some confidence there. Phasing in H1 of deals coming back to market, what was a slight headwind in the first half, I see that softening in the second half. When we've seen that up with the property management growth, organic is certainly what I'd be expecting to see across the third quarter. I look forward to reporting back on that at the end of the third quarter.
The final question now on the web, this is again from Robin Savage at Zeus. If you'd like a reminder on the importance of our value-added property management service, and particularly called out the 9% growth we talked to in the statements. I just want to pick that up in terms of the importance of that service.
I'd love to. Thanks, Robin. Yeah, look, property management for us really is one of the key drivers for our long-term growth within the business. We've really, I think, modernized and really spent a huge amount of time over the last three years looking at property management to find ways that we can increase the cross-sell from the front offices. Now, generally, very generally across London, we've seen glass-ceiling levels of conversion into this probably being around the 30%, 35%. Because of the focus, the training, and this very much linked position between what the front offices are doing and what our property management teams are delivering here at Chiswick Park, we've been able to see a considerable increase in that upsell into property management for this premium service. If you remember, we charge a 6% premium for that excellent service where it's literally hands-off for our landlords.
That really is a proudly word service for them, but it's a very important service that we provide to make sure that we deliver exceptional service. I think it's fair to say that across the whole of the UK, the property management levels of service aren't what I would say is exceptional. We are working towards an internal mandate to say we want to be able to deliver a level of service excellence that is unseen in the rest of the industry. We will do that through really listening to our clients, really listening to the tenants through the journey of property management, through the journey of the lifecycle of that property being with Foxtons, and making sure that we're constantly evolving the service that we deliver. We're finding any areas that we need to focus on.
We're using the best technology platform to be able to speed up various aspects, whether it be report raising, report analysis, getting these jobs looked after and taken care of by our contractors. All of this is a big area of wins for us. Ultimately, it's really important because the more that we can load in in conversion, the larger that portfolio grows over time. Of course, that's our primary objective here is to make sure that we're constantly growing the properties under management portfolio. We're really pleased, really, really pleased with progress on this. It's important because those property-managed properties for us are very sticky when we provide a great service. We know that landlords stay with us for longer, which is obviously very important for retention and further growth of that portfolio. This is, of course, margin accretive. It's a premium service that we're able to charge.
With things like our Out of London Property Management Center that we've been growing in the north of England, in the Midlands, this is a brilliant opportunity for us to, A, thrive for that level of service unheard of within the industry, but also see better retention within our teams so that we can deliver that constant strife for service delivery. Hopefully, that answers your question. Closing remarks, I think thanks firstly for your time for joining us today. We're really pleased with the performance in the first half. I think that the revenue growth of 10%, and just breaking that out, lettings up 4% and sales revenue being up 25% is something that we're rightly very pleased with. That reflects very well on our adjusted operating profit being up 31% against the same period last year.
We do know that the sales market has a little less momentum than perhaps we might have expected at the start of the year and that really is primarily down to the rate at which we've seen the speed at which we've seen rates dropping for interest rates. We do see that the gap is starting to close up between last year and this year in terms of aggregate, particularly in the last rolling month. We're working flat out to continue to improve all aspects of the business, particularly around what we're doing in lettings. We know that this recurring sticky revenue that we're growing very, very quickly in lettings is the key to our financial stability, no matter what's going on in the sales cycle. Something that we're really pleased with is progress.
We're working on making sure that we can continue to bring on board great acquisitions within our overall business and integrate them as quickly as possible. We've got a great, you know, the industry's leading team. We've got the industry's leading platform. I think we've got some really good momentum in the business. I'm really pleased with everybody's interest. I look forward to meeting with many of you over the coming weeks as Chris and I go about our city talk. Thanks for your interest and see you all soon.