Property tax hike threat to London’s top global status

SKY-HIGH property taxes and crippling red tape are a threat to London’s status as a great open global city, according to one of Britain’s biggest developers.

Berkeley Group, run by industry veteran Tony Pidgley, said work has started on 30pc fewer homes in the capital in the past eight months than in the same period a year earlier.

The firm, which specialises in building expensive homes in and around London, blamed planning delays, higher stamp duty and a tax raid on landlords as well as uncertainty following the Brexit vote.

The housebuilder warned that the chronic shortage of housing ‘represents a threat to London remaining the inclusive and open global city which is so important to the UK’s growth and prosperity’.

But Berkeley also appeared to call the bottom of the London housing market, saying that sales of new homes were picking up again following a slump in the second half of last year. It said reservations between August and February were 16pc lower than in the same period a year earlier, but added that January and February 2017 were ahead of January and February 2016.

‘The housing market in London and the South East has stabilised,’ it said, adding profits for this year will be ‘at the top end of analysts’ expectations’.

Berkeley said it was also on course to hit its target of delivering £3bn of profits in the five years to 2021, which sent rising 6.1pc, or 181p, to 3144p. George Salmon, an equity analyst at Hargreaves Lansdown, said: ‘Berkeley has provided a resilient update.’

Sales of expensive homes have slowed since the EU referendum and a string of tax hikes introduced by George Osborne.

Berkeley also revealed that it has not started building on 22 sites in London and the South East because of delays in the planning process. Solving these issues quickly was ‘key to delivering the much-needed additional new homes’, it said.