(Bloomberg) -- London estate agent Foxtons Group Plc’s sales under-offer pipeline swelled to the highest level since 2016 at the start of the second quarter, adding to signs lower borrowing costs and strong wage growth are bringing previously hesitant buyers back to the UK property market.

The value of property under offer was 34% higher than 2023 at the end of March and 12% higher than 2022, the company said in a statement on Thursday. Sales revenue climbed 17% in the quarter to £9.5 million ($11.9 million), while the volume of sales agreed jumped 31%. Foxtons has benefited from acquisitions last year, gaining market share.

“We entered the second quarter with the highest value under-offer sales pipeline since the 2016 Brexit vote,” said Chief Executive Officer Guy Gittins. That gives the company “optimism for the rest of the year,” he said.

The shares jumped as much as 6.1% in early trading before paring gains to trade up 2.3% as of 10:31 a.m. London time. Foxtons has climbed about 16% in value this year.

The drive to own a home has strengthened in the UK as rents soared while anxiety about being priced out of the market deepened. Some 72% of first-time buyers outside London cited this as their primary motive for buying, up from 61% last June, a March survey by Bloomberg Intelligence showed. In London, the share ticked up to 69.7% from 67.9%. UK rents rose at a record 9.2% pace in March, the Office for National Statistics said on Wednesday.

Foxtons’ sales and pipeline gains are “being driven by continued strong levels of buyer interest and – crucially – better stock levels, and should support revenues in the second quarter,” analysts at Peel Hunt said in a note reiterating their hold recommendation on the stock.

Activity was slightly more subdued in Foxtons rental business, which contributes 70% to total revenue. Lettings revenues were “broadly flat” on a like-for-like basis, the company said, adding that the supply and demand dynamic had normalized since last year, when a shortage of available rental properties sent rents surging.


--With assistance from James Cone.

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