Estate agent Savills awards boss 44% pay rise as London house prices soar

The upmarket estate agent Savills has awarded its boss a 44% pay rise, in another sign of London's runaway property market.

Jeremy Helsby, group chief executive, earned £2.6m in pay and perks for 2013, compared with £1.8m the previous year. Helsby, who joined the estate agent in 1980, saw his basic salary unchanged at £225,000, but gains a £610,000 windfall in shares, available from May, as well as a £363,000 increase in cash and shares under the company profits-sharing scheme. Chief financial officer Simon Shaw is in line for the same increase, taking his overall reward to £1.9m.

In its annual report published on Monday Savills said it had "an exceptionally strong finish to the year including a record performance in the UK", where revenues were up 16%, and underlying profits jumped 26% to £55m. The firm's 26,000 staff will share in a bumper bonus pot of £169m, compared with £138m last year.

The estate agent has a strong foothold in the prime London market, where its average selling price is £3.2m.

Savills' robust performance in central London, where volumes increased 13% year-on-year, reinforces data from the country's biggest building society Nationwide last week, which showed that house prices in the capital have increased by almost a fifth over the past 12 months, and are now 20% above their pre-crisis peak. Responding to fears of a housing bubble, the chancellor, George Osborne, said the government and regulators would have to remain vigilant.

Savills also noted the London effect was spreading to "prime commuter zones" such as Cambridge, Oxford and Winchester, which have seen average price rises of 10% in the last year. But despite the boom, overall sales volumes still remain 15% below the 2007 peak in the capital, and 26% outside London.

Estate agency and property development groups have enjoyed boom-like conditions over the past year, with the government's Help to Buy and Funding for Lending re-igniting the market.

London–focused estate agency Foxtons raised £390m on its stock market flotation last September, since when it has seen its shares jump from 267p to 366p. Its first set of results in March this year revealed first-half profits ahead 56% to £39m. In February Countrywide, the estate agency with 380 branches under a variety of brands including Hamptons and John D Wood, said its operating profit was up 234% to £56m.

Shares in Savills have doubled over the past two years, climbing from around 300p to close at 665p yesterday.

Building firms have shared in the profits bonanza. Barratt Developments recently revealed a 162% leap in profits, while Persimmon, Taylor Wimpey and Redrow have all reported bumper figures.

The property boom, at least in the London area, is also pushing wages for bricklayers above £100,000 a year, according to a report by consultancy EC Harris, after a "brawn drain" of labourers during the recession has left the capital with a shortage of skilled workers.