The strong results meant the company revised its pre-tax profit guidance to £3.3 billion from £3 billion, but it said 2017/18#8217;s results would be a #8220;peak#8221; before returning to normal returns in 2018/19.
#8220;Brexit uncertainty and concerns over growth and inflation, coupled with the changes to SDLT (stamp duty land tax) and mortgage interest deductibility, continue to impact the market.#8221;
Berkeley#8217;s caution reflects wider concerns about the capital#8217;s housing market, where decades of runaway price growth is seeing affordability stretched to breaking point. Estate agents Savills predicts London house prices will dip 2% next year despite rising nationally.
The group posted strong profits but warned of a tough outlook next year, as Brexit and inflation bites.
The firm said factors driving the slowdown in transactions included stamp duty hikes, uncertainty surrounding Brexit, and a tax change which means landlords from 2020 will no longer be able to deduct mortgage interest costs when they calculate taxable profits.
LONDON — Transaction volumes in London, the number of houses being bought and sold, have dropped 18% since last year, according to housebuilder Berkeley.