Savills becomes latest estate agent to warn over challenging housing market

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Savills has posted a strong set of results for 2017, but has also cautioned that this year will be a challenging one, citing heightened market uncertainty, geopolitical risks and rising interest rates.

The estate agent on Thursday reported a 3.5 per cent increase in underlying profit for the year to the end of December, to £140.5m from £136.6m a year earlier. Group revenue rose by 11 per cent to £1.6bn and underlying basic earnings per share increased by 5 per cent to 75.8p.

But Savills warned that while it had delivered a “strong” performance in 2017 and made a “solid start” to 2018, the property market was set to cool down over the coming months.

“We anticipate a tempering of the strong transaction volumes of recent times in some markets,” said chief executive Jeremy Helsby.

He said that for now, Savills was keeping its guidance for the current year unchanged.

House price growth has been slowing over the last year, with prime properties in the centre of the capital among the hardest hit.

Late last month, Foxtons reported a slump in annual results, citing sales activity in London being “near historic lows”.

It said that overall group revenue for the 2017 calendar year had come in at £117.6m, down from £132.7m in 2016. Profit before tax tumbled to £6.5m from £18.8m while its basic earnings per share slipped from 5.7p to just 1.9p last year.

“Sales activity in the London property market is near historic lows and this had a significant impact on our overall performance in 2017,” Foxtons chief executive Nic Budden said at the time.

“Looking ahead, we expect trading conditions to remain challenging during 2018, and our current sales pipeline is below where it was this time last year.”