Savills sees property sales falling on Brexit uncertainty

Estate agency Savills has said it expects property sales across a number of markets to fall this year due to uncertainty surrounding Brexit and US trade policy.

The group said prospects for 2019 are “overshadowed by macro-economic and political uncertainties across the world” and that it is difficult to predict the effect on investor demand for the property sector.

Its comments come ahead of crunch day in Parliament on Tuesday as MPs are set to vote on Prime Minister Theresa May’s contested Brexit deal.

Earlier, housebuilder Persimmon hiked full-year profit expectations thanks to increased production and a robust UK housing market, but cautioned it remains mindful of economic uncertainty related to Brexit.

But Savills said the decline in sales volumes should be offset by the less transactional businesses – such as its consultancy and property management business – which should result in a “broadly consistent” trading performance this year compared with last year.

During the last quarter of 2018, the company said its business lines delivered growth in revenue and profits thanks to its less transactional trading activities.

This was achieved despite a period which saw heightened uncertainty surrounding Britain’s departure from the EU, US-China trade relations and higher long-term treasury yields hitting investor sentiment in a number of global markets.

For 2018, results are expected to be in line with expectations with the commercial transaction business in the UK – Savills’ biggest market – performing well thanks to robust demand from the Asia Pacific, although the trade volume declined in comparison with 2017.

The UK residential business increased its share of the market, while the consultancy and property management business, in the UK and globally, performed in line with expectations.

Meanwhile, the company said it ended 2018 with a stronger cash position than initially expected due to a reduction in business investment.

Savills’ full-year results for 2018 are set to be published on March 14.