Berkeley Says Home Reservations Fell 20% on Taxes, Brexit

(Bloomberg) -- Berkeley Group Holdings Plc said reservations for new homes dropped 20 percent in the six months through October from a year earlier as buyers delayed purchases after property taxes rose and the U.K. voted to leave the European Union.

“Excluding an hiatus around Brexit, reservations are 20 percent down on the same period last year as a result of the market adjusting to increased stamp duty and the economic uncertainty arising from the result of the EU Referendum,” London’s biggest homebuilder said in a filing.

Home values in London will fall for the first time since 2009 next year as a result of uncertainty regarding the U.K.’s exit from the block, according to Countrywide Plc. Demand for the most expensive homes has already been hit by higher stamp duty sales taxes, which rose 3 percent for landlords and second-home purchasers in April.

Profit before tax rose to 392.7 million pounds ($496.2 million) in the six months through October 31, up 34 percent from the year-earlier period, Berkeley said. The company reiterated a guidance of 2 billion pounds in pretax profit for the three years ending April 2018.

To contact the reporter on this story: Sharon Smyth in London at ssmyth2@bloomberg.net. To contact the editors responsible for this story: Neil Callanan at ncallanan@bloomberg.net, Vernon Wessels, Christian Baumgaertel