Savills saw revenue from residential property re-sales fall 8 per cent in the first half of 2025, the estate agent’s latest results show.
It added that the upcoming Autumn Budget was having a ‘dampening effect’ on corporate and private investment activity across Britain.
Chancellor Rachel Reeves is anticipated to make further tax increases, including potentially changing the rules on inheritance tax.
Savills shares fell 5.64 per cent or 55.00p to 920.00p on Thursday, having fallen over 22 per cent in the past year.
The estate agency group said the decline in sales across its residential re-sale agency arm, which excludes new build sales, emerged as a result of ‘the impact of actual and potential tax changes on sentiment.’
Exchange volumes slipped 1 cent, which Savills said was driven by a reduction of 7 per cent in prime London locations.
Sales of new developments performed more strongly, rising 13 per cent year-on-year, with average values ‘marginally increased.’
The company’s institutional residential and student housing revenue increased by 32 per cent in the period.
Savills said: ‘The overall impact of these movements was a reduction of 2 per cent in UK residential revenue for the period.’
Chief executive Mark Ridley added that Savills saw a slowdown in transaction volumes across its markets in the second quarter.
He said: ‘Q2 saw a slowing of transactional activity as occupiers and investors digested the implications of tariffs and geopolitical events.’
The business flagged ongoing uncertainty over Britain’s economy and fiscal policies.
It said: ‘In the UK, the impact of actual and potential fiscal change (forthcoming October Budget) had a dampening effect on corporate and private investor activity through Q2 resulting in a 13 per cent reduction in real estate market investment volumes period-on-period.’
Across its global operations, Savills posted a 6 per cent rise in group revenue to £1.1billion in the six months to the end of June.
Underlying profit increased by 6 per cent to £23.3million up from £21.2million, while reported pre-tax profit rose by 78 per cent to £15.8million.
Underlying basic earnings per share fell to 11.7p, reflecting an increase in taxes paid during the period.
Volume transactions fell in China by 26 per cent year-on-year, leading to a year-on-year reduction of around 13 per cent in investment volumes for the Asia Pacific region.
The firm’s auction arm sold more than £420million worth of commercial and residential property during the period, up 8 per cent year-on-year.
The board declared an interim dividend of 7.4p per share, up from 7.1p in the first half of last year.
Analysts at Deutsche Numis, said: ‘Savills reports that transactional pipelines continue to grow, which should support the market recovery reasserting and the attainment of full-year expectations – although this will clearly be dependant on the pace of recovery.
‘We think this caution is merely a timing point, and that Savills earnings should recover strongly overt the next few years.’
Analysts at Peel Hunt, said: ‘While Savills remains vulnerable to to shorter-term volatility in property transactions in particular, the group’s more stable businesses continue to deliver robust results.
‘Normalisation of commercial property activity should see profits improve materially in the next few years.’
This week housebuilder Persimmon flagged ongoing ‘affordability constraints’ across the property market.
‘While interest and mortgage rates have reduced, they are at levels that still present a barrier to many potential customers’, Persimmon said.
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