Is London House Price Party Over?

Savills has recorded another significant leap in profits but says the house price party is over in central London.
“People are selling up in London. They’ve had a very strong rise over the last two to three years, especially families with kids who decide they can’t get the right schools and want more space” according to group chief executive Jeremy Helsby.

Deals outside London rose 20 per cent in the first half of 2014, to £59.6m – in the same half of last year, the figure was £52.5m.

The firm recorded a 15 per cent rise in pre-tax profits to £24.7m for the first six months of 2014 and boosted its half-year dividend by seven per cent to 3.75p a share.

In residential terms, the so-called prime London market “remained robust with a relatively subdued top end” according to Helsby.

Overall Savills’ volume of exchanges in London increased by nine per cent over the same period of last year.

One of the few pieces of bad news for Savills was the fall in revenue from new-build properties, down six per cent during the period and described by the company as “primarily relating to the timing of completions.” During the same period, buyer reservations of new homes actually increased by 12 per cent.

This latest set of figures makes no reference to bonuses and perks distributed to Savills staff – described by a rival London agent as “the most generous in the industry.”

Back in April, Estate Agent Today reported that Jeremy Helsby earned £2.6m in pay and perks last year, a 44 per cent rise on 2012. Chief financial officer Simon Shaw is enjoying a similar rise, to £1.9m.