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Estate Agent Knight Frank Insists Property Market Is Bouncing Back

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Knight Frank has shrugged off a 66% drop in full-year profits, insisting the stricken property market is bouncing back and its business remains in rude health.

The upmarket estate agent, which sold Compton Bassett House in Wiltshire for about £8.5m to the pop star Robbie Williams early this year, said house prices were stabilising and residential sales during August were up 37% on the same time last year.

Nick Thomlinson, senior partner and chairman of Knight Frank Group, said commercial property prices also appeared to have hit bottom after a slide of almost 50% in the past 18 months.

“In the four months to August we have continued to trade profitably across the group, with particular strength in our UK residential business, which has once again outperformed the market,†Thomlinson said.

He sounded a note of caution, however, saying that recovery in the housing market remained fragile and patchy and that further price falls continued to be a possibility because of the shortage of mortgage finance and the economy’s struggle out of recession.

On commercial property, Knight Frank warned that despite improved pricing for investment sales, it could be 2012 before rents begin to rise again across the market.

The group’s accounts showed that in the year to April 30, 2009, turnover fell from £333.9m to £255.7m and pre-tax profits plummeted from £59.2m to £20.8m.

Knight Frank remains conservatively financed, with no debts, and at the year-end it had £28.5m of cash in the bank. It has a £30m revolving credit facility which is currently unused.

During the boom the firm’s partners collected bonuses of more than £1m but as a result of the more difficult conditions they received an average payout of £169,000 last year.

Could it be that trade has picked up because competitors have closed?

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KFR "insist" its bouncing back?

I like this comment below the farticle:

Real Istbear wrote:
The stimulus had a temporary effect. The fundamentals (unemployment, debt levels, credit) all remain negative. Estate Agents will try to talk the market up but the reality is houses have much further to fall before a bottom is reached. They are still grossly overpriced in relation to wages and rentable values. Buy when they have dropped another 30% or so.
September 13, 2009 9:24 AM BST on UK-TimesOnline


Edited by Realistbear

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