Reservations on new home builds down 20%

Builder Berkeley Group has reported drop in reservations by buyers for new homes

Berkeley Group, which has given a trading report to the City, says reservations for its new homes are down 20 per cent thanks to uncertainty over a possible Brexit and because of the government’s recent anti-buy to let tax measures.

Berkeley builds relatively high-cost homes primarily in London and the south east of England.

“Global macro uncertainty and the impending EU referendum have had a dampening effect on investment levels across all businesses and this is likely to continue up to and immediately after the result of the referendum. This, along with the market adjusting to higher levels of property transaction taxes, has affected the upper end of the housing market in London” according to the statement.

But Berkeley chief executive Rob Perrins insists “underlying interest and demand remain good” and prices for properties in the “more mainstream” market – those worth less than £1.25m – are still rising.

Berkeley reported to the City that it had suffered a three per cent dip in sales to £2.05 billion in the year to the end of April, despite a 13pc rise in the number of homes sold to 3,776. The reason for the decline was partly due to a fall in the average selling price to £515,000 from £575,000, and the group’s move into less expensive market sectors.

Written by: Houseladder