18th Mar 2016 13:55
LONDON (Alliance News) - The Berkeley Group Holdings PLC on Friday voiced concerns about the UK government's housing policies, as it said its high-end property sales in the two months to end-February were in line with the previous year, when the market slowed in the run-up to the country's general election.
The FTSE 100-listed housebuilder, which focuses almost exclusively on more-expensive developments in London and the South East of England, said on the whole trading conditions are positive in the housing market and are stable in London, in spite of "global macro uncertainty, including the impending UK European Referendum".
Berkeley added it is continuing to see good underlying demand for its properties.
However, whilst Berkeley said it expects to deliver results for the year to end April at the top end of expectations, it said transaction levels at the upper end of the housing market have been affected by the "significant increase" in transaction taxes over the last 18 months, which it said "will have consequential effects on both social mobility and the supply of new homes".
The housebuilder said that, since its interim results in December, it has sold 62 properties priced over GBP2.0 million, in line with a year earlier, when the high-end UK market slowed ahead of the UK's general election amid voter uncertainty.
This comes after several of Berkeley's peers including Redrow PLC and Barratt Developments PLC pointed to a damped demand in Central London, where properties are priced higher, due the reform on stamp duty, which was implemented in December 2014 and saw the charge for people buying homes costing more than GBP938,000 increased.
Berkeley said it welcomed the UK government's intentions to address the supply-demand imbalance in the housing market, but was concerned that a number of policies were "complex and sometimes conflicting", adding there were "competing demand on limited and reducing public sector resources" and the UK has "one of the world's highest property taxation regimes".
However, the housebuilder said it remains on course to deliver GBP2.00 billion pretax profit in aggregate over the three years to 2018, and said GBP25.0 million of accelerated operating expenses coming from changes to its long term incentive plan will boost results for the current financial year.
It added it has made "good progress" in enhancing its land holdings the four-month period to the end of February, through three new and nine revised planning consents. Berkeley said it also acquired four sites in the period, including two conditionally contracted long-term regeneration schemes.
In line with the enhanced shareholder dividend return programme, announced in December, Berkeley said it was on track to announce a final dividend of 100.00 pence per share in September at its full-year results.
Net cash at April 30 will be in the region of GBP100.0 million, Berkeley said, which will allow for further land expenditure.
Shares in Berkeley were down 3.1% at 3,156.00 pence Friday afternoon.
By Hannah Boland; [email protected]; @Hannaheboland
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