Foxtons this morning reported turnover down 12.1% in the last quarter of last year compared with the same period in 2013.

It said this was “due to reduced sales commission more than offsetting growth in lettings commission”. However, full year group turnover was up 3.4% on 2013.

The firm said that the sales market “remains challenging” and that transaction levels were “subdued” in central London.

The slowdown became marked as last year went on and Foxtons say they do not expect a recovery in transaction volumes until after May’s General Election.

Residential lettings improved significantly during the final quarter of last year, with a 7.7% increase in revenue compared with the last quarter of 2013, and full-year lettings revenue up 1.5%. Lettings now accounts for half of Foxtons’ revenue.

Foxtons said it now anticipates full year EBITDA (profits after costs) to be around £46m, down from 2013’s figure of £49.6m.

Despite the slip in profits, Foxtons said the long-term fundamentals of the London market remain sound and it is sticking to its growth strategy of opening five to ten new branches each year.

The firm also emphasised that it remains “highly profitable, cash generative and debt free”.

The firm issued a profits warning last October, saying that the London housing market was slowing markedly.

Last week, Countrywide also said there had been a slowdown as the year went on, particularly in London and in the third quarter of the year.

Foxtons’ shares are nearly at their lowest level since the firm floated in September 2013.

Yesterday, they closed at 162p.