Savills warns Budget uncertainty and Q2 sales slump have dented UK transaction activity

Savills reported modest H1 revenue growth and higher interim dividend, but an 8% fall in UK residential re‑sales and a Q2 pause in transactions – blamed on fiscal uncertainty ahead of the autumn Budget and geopolitical nerves – prompted a share sell‑off and left management warning near‑term performance will hinge on clearer fiscal direction.

Savills has told investors that a slump in secondary residential sales and nervousness ahead of the government’s autumn Budget weighed on activity in the second quarter, even as the group posted modest revenue growth across its global business in the first half of 2025. The estate agent said revenue from its UK residential re‑sales arm — which excludes new‑build transactions — fell by about 8% in the six months to the end of June, and warned that uncertainty around forthcoming fiscal decisions had a “dampening effect” on both private and corporate investment. The comments were made in the company’s interim results statement.

On a group basis Savills reported revenue of roughly £1.13bn for the period, with reported pre‑tax profit rising sharply to about £15.8m and underlying profit in the low‑£20m range. Different market summaries set the underlying profit change at slightly different levels — some noting a 6% rise to £23.3m, others describing a larger percentage increase — but all record the same headline earnings figure and an underlying basic earnings‑per‑share of about 11.7p. The board lifted the interim dividend to 7.4p a share.

Investors reacted to the slower second quarter: Savills’ shares fell more than 5% on the day the results were published as markets digested the Q2 pause in transactions. Market commentators noted that upbeat early‑year trading was tempered by the slowdown and that sentiment appeared to have been affected by both geopolitical uncertainty and expectations of nearer‑term tax changes.

Management framed the weakness in transactional volumes as a near‑term pause rather than a structural problem. Chief executive Mark Ridley said in the results statement that “Q2 saw a slowing of transactional activity as occupiers and investors digested the implications of tariffs and geopolitical events,” and the group reported a 13% reduction in real‑estate investment volumes period‑on‑period in the UK. Savills also pointed to a fall in prime London exchange volumes and weaker turnover in certain overseas markets as contributors to the decline.

There were bright spots. Sales of new‑build developments increased by around 13% year‑on‑year and the company’s institutional residential and student‑housing business grew strongly, while its auction operation raised a record c.£420m across live and online sales — a performance Savills said reflected robust regional demand and widening participation in online bidding. At the same time, activity in Asia was softer: transaction volumes in China slipped substantially, which contributed to a double‑digit drop in investment volumes across the Asia‑Pacific region.

The group’s caution over UK activity explicitly linked back to the policy backdrop. Savills told investors that both actual and anticipated fiscal changes ahead of the autumn Budget had dented buyer and investor confidence, a view that sits alongside wider commentary from Westminster. Reporting on Chancellor Rachel Reeves’ priorities has emphasised a push for productivity‑boosting investment while acknowledging the possibility of further tax measures to shore up the public finances — speculation that advisers and some market participants say is already changing behaviour.

Wealth managers and advisers, in particular, have been signalling concern about potential changes to inheritance‑tax rules and other measures that could affect high‑net‑worth clients, prompting a rise in planning enquiries and adding to near‑term market caution. At the same time, housebuilders and sector analysts point to persistent affordability constraints: although interest and mortgage rates have eased from their peaks, they remain high enough to deter many buyers and cap demand in parts of the market.

Analysts welcomed the diversified nature of Savills’ income stream while urging caution over timing. Broker notes highlighted that transactional pipelines were reportedly growing and that, should volumes recover, Savills’ earnings could rebound materially; but they also warned that the pace of recovery will be crucial and remains dependent on clearer fiscal direction and broader macroeconomic stabilisation. Savills has maintained its full‑year expectations while signalling that near‑term performance will be sensitive to how and when investment activity resumes.

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Source: Noah Wire Services

Noah Fact Check Pro

The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.

Freshness check

Score:
8

Notes:
The narrative is recent, dated August 14, 2025. The earliest known publication date of substantially similar content is July 24, 2025, when Savills revised its 2025 house price growth forecast to 1% due to a more cautious market outlook. ([mortgagefinancegazette.com](https://www.mortgagefinancegazette.com/market-news/housing/savills-slices-2025-house-price-growth-forecast-to-1-24-07-2025/?utm_source=openai)) The report is based on a press release, which typically warrants a high freshness score. No significant discrepancies in figures, dates, or quotes were found. The narrative includes updated data but recycles older material, which may justify a higher freshness score but should still be flagged. ([mortgagefinancegazette.com](https://www.mortgagefinancegazette.com/market-news/housing/savills-slices-2025-house-price-growth-forecast-to-1-24-07-2025/?utm_source=openai))

Quotes check

Score:
9

Notes:
The direct quotes from Savills’ CEO Mark Ridley and other company representatives are unique to this report. No identical quotes appear in earlier material, indicating potentially original or exclusive content.

Source reliability

Score:
7

Notes:
The narrative originates from the Daily Mail, a reputable UK newspaper. However, it is important to note that the Daily Mail has faced criticism for sensationalism and accuracy issues in the past. Therefore, while the source is generally reliable, caution is advised.

Plausability check

Score:
8

Notes:
The claims about Savills’ revenue decline due to a slump in secondary residential sales and market uncertainty ahead of the Autumn Budget are plausible and align with recent market trends. Similar reports have highlighted challenges in the property market due to rising interest rates and geopolitical uncertainties. ([independent.co.uk](https://www.independent.co.uk/news/business/global-property-market-slowdown-drives-tumbling-profits-at-savills-b2512513.html?utm_source=openai)) The language and tone are consistent with typical corporate communications.

Overall assessment

Verdict (FAIL, OPEN, PASS): PASS

Confidence (LOW, MEDIUM, HIGH): HIGH

Summary:
The narrative is recent and based on a press release, indicating high freshness. The quotes are unique, suggesting original content. The source is generally reliable, though some caution is advised due to past criticisms. The claims are plausible and consistent with recent market trends. Therefore, the overall assessment is a PASS with high confidence.