Housebuilders have their say on the state of the housing market

Redrow and Berkeley have painted very different pictures of the state of the housing market post-Brexit vote, with Redrow bullish and London-focussed Berkeley downbeat.

In bumper full-year results posted this morning, Redrow, run by Steve Morgan (pictured, left) said sales in the 10 weeks since the EU referendum were actually 8% up on a strong period last year. The firm added: 鈥淲e have seen very little impact as a result of the Brexit vote.鈥�

In its results for the year to this June, Redrow posted a 23% jump in pre-tax profit to 拢250m, up from 拢204m, while revenue increased 20% to 拢1.38bn, up from 拢1.15bn. Legal completions rose 17% to 4,716, up from 4,022.

Meanwhile, in a trading update, Berkeley said customer reservations for its new homes were 20% down on 2015.

The London-focussed builder had previously told investors reservations were 20% down over the first five months of 2016 in the run up to the EU referendum, and, following a 鈥渉iatus鈥� either side of the vote, reservations continued at this subdued level in August.

The firm 鈥� founded by Tony Pidgley (pictured, right) 鈥� bought just two development sites since the vote and said it will continue with a more selective approach to land buying.

Berkeley said despite more challenging market conditions, it was still on course to deliver 拢2bn of pre-tax profit over the three-year period to 2018, having generated 拢500m in its first year.

It also said it would continue delivering returns to shareholders, and would pay a 拢1 interim dividend as planned this month, with a further 拢10 per share staggered over the next five years.

But it took aim at the government鈥檚 housing policies, saying that whilst they have 鈥渂een helpful outside London, [they have] had a negative effect on the capital鈥�.

The housebuilder said transaction taxes were too high, hitting the supply of homes in the South-east, as were Community Infrastructure Levy charges adopted by local authorities.

Berkeley also criticised the 鈥渢ension鈥� between the Conservatives鈥� starter homes policy nationally and London mayor Sadiq Khan鈥檚 ambition to build more affordable housing.

The firm added: 鈥淲hile these challenges persist, and the barriers to entry for small builders remain high, London will fall well short of its targets for new homes.鈥�

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