Upmarket, global real-estate firm Knight Frank reports its pre-tax profits fell 4.5% in the full-year to March 2017. However, turnover over the same period was £476.2 million, a 3.3% rise on a year earlier.
The second straight annual pre-tax profit fall comes as the UK’s prime property market remains subdued. Add in a loss of top-end buy-to-let investment due to stamp duty changes and Brexit-induced worries, and it’s clear to see how a loss of momentum across the UK markets has weighed on the firm’s business.
Despite the decline in profits, Knight Frank senior partner Alistair Elliot said: “We’re in a better place than I thought we’d be a year ago,” according to a Property Week report.
Not all about the UK
However, while the UK’s prime property market is a significant one for Knight Frank, it’s not the only one. The firm said business in some overseas markets, particularly Africa, Asia-Pacific and the Middle-East, had driven much of the turnover growth.
In addition, Knight Frank Investment Management had a successful 12 months. Indeed, that arm of the business could be set for further growth, as Knight Frank identifies more business in the private rental sector.
Prime Central London prices continue to fall
While Knight Frank’s leadership team may be upbeat about the future path of the business, prime London property prices remain under pressures.
According to Knight Frank’s own research, the average price of a prime London residential home was 4.6% lower in September 2017 than a year earlier. The slowest decline in almost a year.
Meanwhile, average rents in prime London lettings sector also continue to fall. They were down 3.3% on the year in September. Although, the property management firm said this was the smallest fall since June 2016.
“The current pricing trend remains in line with our forecast for broadly flat price movement this year,” said Tom Bill, head of London residential research for Knight Frank. “Buyers remain cautious and transactions are taking longer to undertake.”