Savills warned today its profits for this year would be ‘significantly below’ analysts’ forecasts.

It also said it would review its dividend policy in light of the full year results for 2008, which are due to be released on 11 March next year.

The news sent Savills’ shares down 12% to 219p in early trading.

Savills already warned its profits would be below expectations in October this year.

This morning, Savills’ house broker, RBS Hoare Govett, cut its expectations of the firm’s profit to £32m, down from £40m.

Chief executive Jeremy Helsby said: ‘The market has not got worse since October in our core markets. But in the US and Europe, where our businesses are almost totally transactional, it is worse. There are very few transactions being done.

‘Trading is worse in the US, Europe and mortgage broking. Our UK commercial and residential businesses, and our Asian business, are still trading in line with expectations.’

He said Savills’ property management and consultancy businesses were trading strongly globally.

However he said that there could be a recovery in the UK markets next year as global investors see value.

‘In Europe, yields are still too high,’ he said. ‘The UK and London reacted more quickly to the market so now international investors want to spend in the UK and London. The UK is going to benefit.’

He said that the lack of transactions in the market, caused by the lack of debt, remained an issue.

‘Banks are still not lending. With no debt, people don’t want to buy buildings. This is not a property crisis; the fundamentals are still strong. It is a banking crisis.’

He said there could be some more activity next year, after a ‘tough’ first quarter. In the meantime, he said Savills will continue with cost cutting – it is aiming to save £20m – as well as focusing on new revenue streams.

He said: ‘We will look at corporate recovery; this will be a huge area of the business next year. The public sector will also grow.’

He said Savills’ lack of debt put it in a strong position for the tough conditions ahead.