Estate agent group Savills raked in more than £1bn in revenue this year despite residential sales market pressures from rising interest rates and fewer houses coming onto the market.
The firm saw an 11% increase in its group revenue in the first half of the year, with total revenue hitting £1.03bn against £932.6m in the same period last year.
But revenue from residential sales dipped by 8% to £95.8m as demand for new homes far outpaced supply and higher interest rates pushed up the cost of mortgages for house buyers.
Savills said the rising cost of debt has begun to drag down house price growth after asking prices soared following the pandemic.
Mark Ridley, group chief executive of Savills plc, said: “2022 has presented a number of heightened macro-economic, geopolitical, and, in some locations, continued Covid-related risks to investors, corporates and to many people’s personal lives.
“I am delighted with the responses of our people and our clients to doing business in challenging circumstances and specifically in respect of their support for Ukraine.
“Despite staff cost inflation and the anticipated increase in discretionary costs, we have performed well so far this year, in line with the Board’s expectations.
“With our strong balance sheet, we are continuing to undertake a variety of business development activities across the Group to enhance our service to clients worldwide.
“With inflation driving interest rates up globally, a new experience for many market participants, real estate markets began to adjust in the second quarter. We expect that process to continue through the second half of the year.
“However, there remains significant investor interest in the secure income characteristics of real estate and occupiers are progressively focussing on improving the sustainability characteristics of their portfolios as well as creating environments in which staff can thrive.
“At this stage it is too early to predict with any accuracy the potential impact of the political and economic environment on real estate transaction volumes globally, although clearly the risk is towards a short-term reduction in activity as markets adjust to, inter alia, rising debt cost. Notwithstanding this risk, given our performance to date and having previously taken a cautious view of likely transactional performance in 2022, at this stage the Board’s expectations for the year as a whole remain unchanged.”
