The decline in profitability was driven by lower revenue in the sales business and additional planned investments in people, brand and technology which offset resilient lettings performance.
Last year Foxtons made a pre-tax profit of £6.5m.
Mortgage broking revenue slightly decreased to £8.3m in 2018 compared to £8.7m in 2017.
Revenue at Alexander Hall, its mortgage broker, comprised a higher proportion of remortgage business, through decreased by six per cent overall as the result of lower average revenue per deal, standing at £8.3m.
The lettings business continues to demonstrate resilience, with revenue of £67m up one per cent from £66.3m in 2017 and an improving performance in the second half of the year.
Sales revenue was £36.2m, down 15 per cent, reflecting continued market weakness due to fewer transactions.
Deterioration in sales market
CEO Nic Budden said the performance was impacted by a further deterioration in the London sales market, with transaction levels falling for another year.
He said: “The outlook for sales remains unchanged with a range of factors, including political uncertainty, likely to contribute to ongoing low transaction levels in the short to medium term. There is momentum in the lettings business and we are pleased with how that business is progressing.
“London is a desirable global city with a sophisticated and varied residential property market. Our brand is synonymous with London property and we have enhanced our offer in order to reinforce our lettings business and position our sales business for any upturn.
“We remain confident of our long term prospects,” he added.
