Developer Barratt cuts price
Up to 10% discount for some of its most expensive London homes
LONDON: Britain’s biggest housebuilder Barratt said it was having to cut the price of some of its most expensive London homes by up to 10% in the latest sign that the market is cooling after Brexit and property tax increases.
Overall, the builder – which operates in most parts of the country – said it remained on track to deliver a key financial target as sales increased due to strong demand in northern and central England.
Average selling prices have fallen in central London, however, due to an increase in stamp duty property tax and the uncertainty created by the June 23 referendum which has put off some domestic buyers and led foreign investors to push for price cuts, according to agents.
“We do recognise that at price points about £600,000, particularly at price points once you move above £1mil, the market is clearly slower,” CEO David Thomas told Reuters.
“You are seeing commentary about prices backing off year-on-year on a 5% to 10% basis so I think that it’s in that sort of order,” he said, when asked about the degree to which the builder was cutting prices.
Estate agents Savills and Knight Frank have said the vote to leave the EU contributed to a fall in prices in London’s most expensive areas, with prices expected to drop by 9% this year, according to Savills.
Thomas said however that he attributed the softening market to an increase in the supply of homes coming to market and a hike in stamp duty property tax, but not the EU vote.
Barratt said that overall its reservations per week increased from a sales rate of 0.71 last year to 0.74 and that it was on target to hit a return on capital employed of 25%. – Reuters