EU referendum: Savills posts record results but warns uncertainty surrounding Brexit vote could slow UK housing market

Kasmira Jefford
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Savills said the strength of its commercial business offset weakness in residential (Source: Getty)

Estate agency Savills posted a strong start to the year but warned that it expects the UK property markets to cool this year due to stamp duty reforms and uncertainty ahead of the EU referendum.

The company beat analyst forecasts by posting a 21 per cent rise in pre-tax profit to £121.4m last year, fuelled by its expansion in the US, market share gains in Asia and the ongoing recovery in Europe.

UK sales rose by 11 per cent to a record £560.1m last year as a strong performance across its commercial business offset a weaker residential performance. Meanwhile underlying profit rose by 21 per cent to £121.4m.

Savills said sales at its residential business declined by one per cent to £127.9m, blaming the slowdown at the prime end of the market on tougher stamp duty rules introduced by George Osborne at the end of 2014.

It said it has seen a flurry of deal activity ahead of the April 1 deadline when the higher buy-to-let stamp duty rate announced in September's Autumn Statement comes into effect.

However the company expects activity to die down after April, which together with the uncertainty surrounding the referendum in June, is likely to dampen the market.

Read More: Our guide to the government's plan to raise stamp duty on second homes

Chief executive Jeremy Helsby, said: We have made a good start to 2016 with a solid pipeline of business carried over from last year in many markets, although the impact of global macro-economic and political concerns on real estate markets worldwide is uncertain."

"At this stage, we retain a cautious view on some Asian markets, particularly the Tier 2 Chinese cities, and we expect the UK residential and commercial investment markets to be subdued, for the former, as Stamp Duty reforms take effect and, more generally, in the run up to the EU referendum in June."

It comes after an industry-wide survey by property advisory firm CBRE forecast that investors and occupiers will behave in the run-up to the EU referendum on 23 June in the same way as they did in Scotland ahead of the 2014 independence referendum, with most delaying major property-related decisions until after the vote.

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