Savills warned this morning that its profits this year would be lower than expected.

The listed property services firm said: ‘Since we announced our half year results on 28 August, our transactional business world-wide have been operating in increasingly challenging markets.

In recent weeks investor confidence has been severely impacted by the recent turmoil in financial markets, which has led to a sharp reduction in transactional volumes.

‘While we currently expect the full year to be waited towards the second half, in light of weaker economic conditions we expect underlying profit before tax to be below the current range of analyst forecasts.’

Savills’ broker RBS Hoare Govett has cut its forecast for the firm’s 2008 results from £52m to £40m. That would be less than half the £85m of profits it made in 2007.

Savills’ shares fell 3% to 214p this morning in response to the profit warning.