Housebuilder set for slump as tax rises hit luxury sales

HOUSEBUILDER Berkeley Group has suffered a sharp fall in sales as higher taxes and global uncertainty dent demand for expensive london homes.

The company said reservations for new homes were down 20pc in the first five months of the year – sending shares down 1.2pc, or 36p to 2954p.

The slump was blamed on worries about the global economy, uncertainty over the outcome of Britain’s referendum on membership of the European Union, stamp duty hikes on expensive homes and increased taxes on landlords.

Berkeley chairman and founder Tony Pidgley said he wanted Britain to stay in the EU – but added that the company would thrive either way. ‘The outcome of next week’s referendum is significant for the UK’s housebuilding and property sector,’ he said.

‘Berkeley supports a vote to remain in the EU. london’s status as the world’s best big city is underpinned by labour mobility, cultural diversity and a constant influx of talent and investment from around the world and the UK economy in turn is powered by the success of our capital city. However, london will always be a world city and a highly desirable place to live, work and play. While we have a clear view about what the better outcome would be, we are confident about the future for our business.’

Chief executive Rob Perrins bemoaned ‘unhelpful changes to property taxation’ – including the rise in stamp duty on homes costing more than £937,000 and the 3pc stamp duty surcharge on buy-to-let landlords.

He also said that ‘global macro uncertainty’ has hit the london market but added that prices are still rising for properties worth less than £1.25m.

The comments came as Berkeley reported a 3.4pc fall in revenues to £2bn for the 12 months to the end of April and a 1.6pc slide in profits to £530.9m.

Analysts at Jefferies said Berkeley delivered a ‘strong performance’, given the recent slowdown in reservations. Experts at UBS added: ‘While we recognise the referendum risk, we see Berkeley in a robust position to weather any weakness in the market.’

Berkeley bosses could split a £348.1m bonus pot over the next five years if a series of share option schemes pay out in full. Shareholders are also expected to get £1.7bn in dividends by 2020.