Property giant Savills today stunned the City with its first-ever profits warning.

Chief executive Jeremy Helsby said the market was in "total paralysis", and the worst it has been for decades.He added that sales of homes and offices collapsed in London and around the world after Lehman Brothers' fall last month triggered meltdown in the financial system.

Helsby now expects profits for the year to be "below the current range of analyst forecasts" of £48 million to £52 million.

The grim news, rushed out two weeks ahead of a scheduled update, sent Savills' shares tumbling 5¾p to 215p, and have now lost 69% of their value since they peaked at 701½p in May last year.

Analysts ripped up their profits forecasts for the year and are now targeting £40 million, less than half the £85 million made last time.

Helsby said: "It has got significantly worse as a result of everything that has been going on in banks. There has been total paralysis, total inactivity. There is a waiting game going on.

"The residential markets are still very tough but they have been tough for some time. Commercial market investors have just stopped buying. Volumes are way down. At the moment, it is almost true to say there are no transactions happening at all, absolutely nothing.

"In my 28 years, this is the worst I have seen it. It is as bad as most people in the property market have ever seen."