Whilst UK residential property only accounts for 13% of Savills global revenue conveyancers may be surprised to learn that Savills saw this area of its business as a key success story last year. Revenues grew by 11.1% but profit before tax for UK residential property grew by a staggering amount. It rose from £2.8M in the prior year to £11.8M in the year ending 31st December 2009.
Savills saw key growth coming from foreign investors benefitting from a weak pound and purchasing properties in central London with 68% of the properties it sold for over £4M going to foreign purchsers. Given that Savills average sale price in London is £2M (compared to the average market price of £336K) and outside London £900K (average £165K) it seems clear that some parts of the market are doing well.
They reported significantly weaker markets outside of London.
The company also announced that it was seeking to open more branches where it sees key grow and had already opened branches in Central London with more to follow.
All this was not without some negatives. Significant cost reductions were made in the residential property side of the business to support the growth in profit and throughout its presentation call for financial analysts the company sounded a note of caution about this year. The market was described as being very uncertain particularly because of the pending election and lack of mortgage credit with the present market being described as one of the toughest the business has ever encountered