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Berkeley says UK housing market sluggish on Brexit run-in

Published 05/09/2018, 08:11
© Reuters. Carpenter Helad adjusts a door in a new apartment in Hackney
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(Reuters) - Berkeley Group Holdings (L:BKGH) said on Wednesday Britain's housing market lacked urgency and was constrained by high transaction costs, limits on mortgage borrowing and uncertainty over next year's planned exit from the European Union.

The British housebuilder, however, also said prices and demand had remained robust in London and the South East between May and August, adding it had bought five new sites in the period.

The company said conditions in the market had not worsened since its profit warning in June.

UK house prices, growing for most of the past 25 years, have softened in the past year as the government struggled to find its way through Brexit talks and speculation mounted that thousands of financial and other jobs could leave the country.

Separately, Britain's biggest housebuilder Barratt Developments (L:BDEV) reported a 9 percent rise in full-year pre-tax profit to 835.5 million pounds as expected, and said it anticipated further growth ahead as it aimed to build 20,000 homes annually in the next few years.

London-focussed Berkeley confirmed its guidance to deliver at least 3.38 billion pounds of pre-tax profits between 2016 and 2021, with at least 1.58 billion pounds of that to be reported in the two years ending April 2019.

The FTSE 100 (FTSE) company had previously warned of a 30 percent fall in pre-tax profit this financial year after it delivered a better-than-expected "peak" performance the year earlier.

© Reuters. Carpenter Helad adjusts a door in a new apartment in Hackney

Smaller rival Redrow (L:RDW) said on Tuesday that demand for new homes in Britain was robust despite uncertainty over the country's departure from the European Union.

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