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London-focused estate agent chain Foxtons has reported a loss for the first half of the year as the capital's property market continues to stagnate.

It said losses were £2.5m, after a £3.8m profit last year.

Foxtons said the property sales market in London was "undergoing a sustained period of very low activity", and sales were taking longer to complete.

However, it said the rental market was strong, and it had confidence in its long-term prospects.

Group revenues in the first six months of the year fell 9% to £53m, with revenue from its sales business down 23% to £17.2m.

Foxtons said the London sales market remained very subdued, with transaction levels now well below historic averages.

It said one of the factors holding back sales included changes to stamp duty, which affected buyers of more expensive properties, second-home owners and buy-to-let investors.

The company also pointed to continuing affordability concerns, particularly acute in London, as a negative factor.

Foxton's chief executive, Nic Budden, said: "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."

Mixed outlook

Foxtons' lettings business has proved more resilient, with revenues down by just 1% in the first half of the year to £31.7m.

Image copyright Foxtons

The company said that lettings continued to deliver a "consistent and stable revenue stream". It added this was a market with good long-term fundamentals, particularly in London where more than one million households were now renting.

Foxtons had warned in March that it expected trading conditions to remain challenging during 2018.

In its latest update it said the outlook was "mixed", with its sales business set to be "very subdued" but more momentum in the lettings market.

Figures from the Bank of England, also published on Monday, showed a slight rise in the number of mortgages approved for house purchases in June compared with the previous month.

There were 65,619 mortgages approved during the month, similar to the average monthly level seen since late 2013.

This is unlikely to affect thinking among policymakers at the Bank who meet this week to decide on the level of interest rates. A rise from 0.5% to 0.75% is a possibility, which would be expected to push up the cost of borrowing for those on variable rate mortgages.