Foxtons swung to a £2.5 million loss before tax in the first half of the year, with overall revenue falling 9% to £53 million.
The estate agent, which made a £3.8 million profit a year ago, blamed declining sales on “ongoing weakness in the London sales market”.
Foxtons has cut its interim dividend from 0.43p per share to zero.
Foxtons’ sales revenue plunged 23% to £17.2 million in the first half, although the lettings business performed better with revenues slipping by 1% to £31.7 million.
The agency said its decline in profitability was driven by lower revenue in the sales business together with investments in its people, brand and technology.
Nic Budden, chief executive, warned that the property sales market in London is undergoing a sustained period of very low activity levels with longer and less visible transaction outcomes.
“We continue, however, to achieve market leading share of listings giving us confidence that our service led, results based model remains highly relevant to consumers,” Budden said. “Going forward we will continue to invest in our proposition to enable us to maintain our differentiation in the minds of buyers, sellers, landlords and tenants.”
Budden said availability of mortgage finance, absorption of stamp duty costs and the return of confidence to the market will determine the timing and rate of increased activity levels in the future.
“Our ability continuously to improve quality, adapt our business models to underlying shifts – such as the expansion of digital capability and institutional investment in the private rented sector – and keep a tight focus on operating costs puts us in a strong position to benefit both from the momentum in our lettings business and to capitalise on increased sales activity as it returns,” he added. “We remain confident of our long term prospects.”