Berkeley hit by stamp duty hike and Brexit uncertainty

Up-market housebuilder Berkeley has revealed demand fell 20% during the first half of its financial year due to the stamp duty hike and Brexit.

Berkeley also announced it was seeking to change its shareholder returns programme in order to be able to buy back shares as well as pay dividends. It said that “at certain points” the company was “materially undervalued” by the market.

Housebuilders that operate across much of Britain are still reporting increased demand, but sales have been hit in London, particularly in the centre, where a higher proportion of buyers are overseas investors.

In the six months to 31 October, Berkeley, which develops in London, said reservations, when a buyer pays to take a home off the market, were down 20% on the same period last year.

However, the company posted a 34% rise in pre-tax profit to £392.7m and a 24% jump in revenue.

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High-end London property has been particularly hit by the 3% 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% due to cooling demand.

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