The UK residential activities of high-end agency Savills suffered a 54 per cent reduction in profits and an eight per cent dip in revenue in the first half of 2020.
Despite what the company calls “an outstanding performance” by its lettings and Build To Rent divisions - which saw a huge 87 per cent leap in revenue in H1 - the rest of the UK residential side suffered badly from the Coronavirus pandemic.
Profits for the six month period fell to £1.6m from last year’s £3.5m with the sales division suffering a 16 per cent drop in income.
Savills overall transaction volumes were down eight per cent in London and 27 per cent in the regions; the strongest market in its ‘core’ London business was in the £500,000 to £1.5m range.
New homes sales dropped 17 per cent during the first of the year with reservations down 16 per cent.
Overall the Savills group - which majors in consultancy and commercial property worldwide, rather than in residential property - saw revenue fall seven per cent to £791.4m.
However, the company has put a brave face on the results, although warning of continuing uncertainty over Covid-19; in particular, Savills chief executive Mark Ridley says the UK housing market recovery in recent weeks gives cause for optimism.
He says: “This recovery was primarily in the country market as buyers sought outside amenity space. But we have also seen a significant recovery in activity in the core London market during the same period together with improved activity from international buyers in Prime Central London.”
On the global activities of the company, Ridley says: “The wider context for real estate investment is largely positive with the expectation of low interest rates for longer and continued, or enhanced, investor demand for income reflected in increased allocations to Real Asset backed strategies.
“In recent weeks we have seen signs of recovery in residential markets and a number of commercial transaction markets around the world.
“Our performance in the second half of 2020 will be highly dependent upon the extent to which such signs become a sustained recovery for the markets in which we operate.”