Savills' fee income up but it warns 'Brexit effect' on market still unclear

Savills residential fee income rose 10 per cent in the first six months of 2016 but the firm warns that it’s too early to predict how Brexit will affect business “in a number of the group’s principal markets.”

In its half-year results to shareholders, the company says group revenue was up 14 per cent to £622.7m against £547m for the same period last year; but the Savills group pre-tax profits were down three per cent to £25.5m against £26.4m a year ago. 

Residential transaction fee income increased to £57.2m from £51.8m in the same period last year and the firm says there was a significant increase in transaction volumes in advance of the stamp duty surcharge in April. This was followed by what the firm calls “a tempering of activity in the lead up to the EU referendum.” 

In the second hand sales market, Savills overall transaction volumes were up by 14 per cent in London and 23 per cent in the country market. 

The average value of London residential property sold by Savills in the period was £2.5m - down from the typical £3m a year ago - but the average remained the same in the country market, at £1m. 

Savills says the new build market “displayed a resilient performance” with national transaction volumes increasing by 26 per cent over H1 2015.

“Savills has delivered a strong first half performance with revenue growth across the group. The resilience of our less transactionally-focused businesses, combined with our geographic diversity, more than offset reductions in transactional activity in certain markets” says Jeremy Helsby, group chief executive at the company. 

“Looking to the second half, at this stage, in the traditionally quieter summer period and so soon after the EU referendum result, it is not possible to obtain a clear read on the direction of activity in a number of the group’s principal markets, although the fundamental attributes of real estate as an investment class remain strong” he says.