Berkeley sees property sales fall 20% amid Brexit pressures
Housebuilder Berkeley Group revealed the property market remained under pressure in August following the Brexit vote as it said sales fell around 20%.
The group, which is focused on London and the South East, signalled the drop was even greater amid a "hiatus" surrounding June's referendum, but said the decrease in reservations had returned to levels seen in the first five months of the year.
Berkeley said there had been a spike in cancellations following the UK's vote to quit the European Union, but said these had now returned to normal.
It added that property prices remained "resilient".
The group said: "After a hiatus either side of the referendum, the market in August, traditionally a quiet month, has returned to the relative levels reported for the first five months of the year - approximately 20% down on August 2015."
It said this was also down to "lower levels of available product, as well as the broader market conditions".
Berkeley added: "Throughout 2016, site visitor numbers and inquiries have been at similar levels to the same period last year, demonstrating the strength of underlying demand, although customers are taking longer to commit."
The group w arned that the recent stamp duty hike for buy-to-let properties and second homes was taking its toll on London's housing market.
It said Government policy was also holding back property developments in the capital, which it said would see London "fall well short of its targets for new homes".
Berkeley said: "This is not just a problem for business and ordinary people in the capital but for the country as a whole. London is the engine of our national economy and the principal driver of fiscal revenues."
Fellow housebuilder Redrow was more upbeat as it posted another set of record annual results and brushed aside fears over Brexit negotiations to predict another "excellent" year for the property market in 2017.
The Flintshire-based firm reported a 23% surge in pre-tax profits to £250 million for the year to June 30 after revenues rose 20% to £1.38 billion, with average selling prices of homes up 7% to £288,600.
Berkeley shares rose 4% after its reassurances that trading had stabilised after Brexit turbulence, but the gains come too late to save it from relegation from the FTSE 100 Index.
The quarterly FTSE Russell reshuffle last week confirmed that Berkeley would be evicted from the UK's top-tier stock index after suffering double-digit share losses in the wake of the Brexit vote.
It will be downgraded to the FTSE 250 on September 19, having seen shares plunge by nearly a third after the referendum.
Laith Khalaf, a senior analyst at Hargreaves Lansdown, said: " Brexit prompted a blip in trading for Berkeley Group, and ultimately led to the company's relegation from the FTSE 100.
"However the housebuilder also faces other headwinds, in particular recent changes to stamp duty which have put a dent in the London property market."