The high end property consultancy, which is owned by its partners, has announced that profit before tax rose by 19 per cent to £162 million in the year to 31st March, while turnover increased by 13 per cent to £443.1 million.
The growth in profits was fuelled mainly by a recovery in the commercial sector; the company’s 10 commercial offices across the UK have had “their best year ever”, according to Alistair Elliott (left), Knight Frank’s Group Chairman and Senior Partner.
He commented, “In the UK, commercial real estate activity has increased and there is now significant life in the sector.
“The regions have spent several years in the doldrums, but we are seeing the commercial lettings market increase, but it must be said this is against a backdrop that has been terrible.”
But while the commercial property market was on the up, Knight Frank said that the residential sector delivered a somewhat mixed performance – owed in part to higher stamp duty rates imposed by the Chancellor George Osborne on homes in the upper sector of the market.
“The prime sector is still absorbing the changes to stamp duty made last December, especially in central London. That said, the market continues to be underpinned by a combination of under-supply of housing, the improving economy and the low interest rate environment,” Mr Elliott added.
He continued, “We have had five or six incredible buoyant years. It’s not surprising therefore that the market has been a bit more constrained. It has led many to reflect and there is going to be lower volumes this year in the higher price brackets.”
HMRC collected a record £7.5 billion in stamp duty from residential property transactions in 2014/2015, up from £6.45 million the previous year, official figures show.
Transactions in London contributed the most residential stamp duty revenue at just over £3 billion, followed by the South East at £1.6 billion. Together these two regions accounted for two-thirds of the total tax take.
Grainne Gilmore (right), Head of UK residential research at Knight Frank, said, “Overall, home buyers still paid more in stamp duty than over the previous 12 months. While the increased take from stamp duty reflects the growth in house prices and a pick-up in transactions, another factor has been the increases to stamp duty charges, especially towards the top end of the market.”