Barratt Developments says it has cut the cost of its most expensive new homes in London by up to 10% as the property market cools.
Britain’s biggest housebuilder said in a trading update covering July 1 to November 13 that it had taken the pricing action at a ‘number of our sites’.
It added: “Further actions to de-risk London delivery include an exchanged build and sale agreement on a bespoke development of 39 apartments for a total value of £47m.”
The company said, ahead of its AGM on Wednesday, that overall market conditions remained healthy and it was on track to meet its targets as sales were robust.
But it pointed to stamp duty increases, a greater supply of new homes and uncertainty arising from the EU vote for troubles in London.
It said foreign buyers had also been pushing for price cuts – despite the collapse in the value of sterling since the referendum which would make a pound-priced property more attractive.
Chief executive David Thomas told the Reuters news agency: “We do recognise that at price points about £600,000, particularly at price points once you move above £1m, the market is clearly slower.
“You are seeing commentary about prices backing off year-on-year on a 5 to 10% basis so I think that it’s in that sort of order,” he said, when asked about the degree to which the builder was cutting prices.
While estate agents Savills and Knight Frank have pointed to a hit to the London market from Brexit, Mr Thomas said an increase in the supply of homes coming to market was a greater factor at this stage.
In the trading statement he added: “We are mindful of the potential for economic uncertainty created by the outcome of the EU Referendum.
“However, market fundamentals are robust, and we remain a housebuilder of choice.”
Official figures released on Tuesday showed London’s house prices still rising at a rate of 10.9% in the year to September.
