Berkeley, Tony Pidgley’s housebuilder lashed out at the Government’s stamp duty tax rises as sales fell and investors dumped the shares.
Berkeley has seen its stock fall 13 per cent so far this year and 5 per cent of its shares are on loan with hedge funds including Crispin Odey’s Odey Asset Management — in effect taking a £200 million-plus bet against the company.
The company slipped another 62p to 3196p on Friday as Berkeley — founded by Pidgley 40 years ago — revealed sales fell 4 per cent between November and February against last year.
The top end of the market continues to struggle with 62 properties sold for more than £2 million — showing no signs of improvement on the market slowdown in the run-up to last year’s general election.
Berkeley insisted underlying demand “has remained strong” despite uncertainty including the impending EU referendum. But it criticised reforms to stamp duty enacted in December 2014 for raising the stamp duty bill on homes worth more than £937,500 and creating “one of the world’s highest property taxation regimes”.
The tax turmoil could prevent people moving and deter development, the builder said, adding: “Transaction levels at the upper end of the housing market have been affected by the significant increase in transaction taxes over the past 18 months which will have effects on both social mobility and the supply of new homes.”
Despite the recent concerns over the market, Berkeley added that profits will be at the top end of expectations — around £526 million — compared with a City consensus of £509 million.
It also remains on course to make £2 billion in profits in total by the end of its 2017/18 financial year as luxury projects in the capital complete and Berkeley shifts more of its building outside London.
City analysts said short-sellers could be burnt as fears of an over-supplied market in Nine Elms and Battersea were overplayed since Berkeley has already sold all the flats in its Riverlight scheme.
Jefferies’ Anthony Codling said: “Berkeley still has developments in the Battersea area but it is not a pure play. Nor does it have significant exposure to the markets causing some to be concerned.”
