By Costas Pitas
LONDON: High-end London builder Berkeley said demand fell 20 percent in the first half of their financial year due to a property tax hike and the Brexit vote, the latest sign that real estate in the capital has been hit by the referendum.
Housebuilders who operate across much of Britain are still reporting increased demand, but sales have been hit in London, particularly in the city centre, where a higher proportion of buyers are investors and many come from abroad.
Berkeley, whose properties include luxury apartment blocks, posted a 34 percent rise in pre-tax profit to 392.7 million pounds ($496 million) in the six months to the end of October and urged government to bring clarity to Britain’s Brexit terms.
“We put a plan forward to build our homes but if you create conditions that are so uncertain or you create a downturn, then that will really cause us to build less homes,” Chief Executive Rob Perrins told Reuters.
The firm said reservations, when a buyer pays to take a home off the market, had been down 20 percent for several months.
Up-market London property has been particularly hit by a 3 percent increase in stamp duty property tax introduced in April on properties bought to be rented out and second homes, affecting London more than other parts of the country.
Britain’s biggest housebuilder Barratt said last month that it was cutting the price of some of its top-end homes by up to 10 percent due to cooling demand.
Berkeley also said on Friday that it was seeking to change its share programme to pay both dividends and buy back shares, in a move which Perrins said would not incur any extra cost.
($1 = 0.7915 pounds) (Editing by Kate Holton)
Source: Reuters