House builder Berkeley sees demand slump on Brexit uncertainty

One of Britain's biggest housebuilders has warned of a sharp drop in demand caused by Brexit uncertainty and stamp duty changes.

FTSE 100-listed Berkeley Group said reservations were down 20% in the six months to the end of October - excluding a "hiatus" around the time of the EU vote in June.

Chief (Taiwan OTC: 3345.TWO - news) executive Rob Perrins said the market was facing "heightened global macro-economic and political uncertainty" both from the Brexit vote and the US election.

Berkeley, which is focused on London and the South East, reported a 34% rise in pre-tax profit to £393m for the first half and said it was well positioned to weather the uncertainty.

It sold 2,076 homes, little changed on the same period last year, at an average selling price of £655,000, which was 29% higher.

But there was a sharp drop in reservations - when a buyer pays to take a property off the market.

Mr Perrins said: "This fall in volume is due to higher stamp duty, the extraordinary attack on buy to let landlords - such an important part of sustaining the London market and increasing the supply of new homes - and the uncertainty caused by Brexit."

Shares (Berlin: DI6.BE - news) in Berkeley have fallen more than a fifth since June's referendum as house building stocks are hit by uncertainty.

Bank of England figures this week suggested the property market was recovering from a post-referendum lull after mortgage approvals climbed to their highest level since March.

However, latest house price figures from Nationwide showed that last month they rose at the weakest annual rate since January.

Berkeley rose 5% on the latest results as investors were cheered by a share buy-back programme in response to the drop in value over recent months.