01 October 2018
Britain’s high-end and luxury homebuilders face a squeeze as Prime Minister Theresa May prepares to impose higher taxes on foreigners looking to buy properties in the U.K.
Overseas buyers account for roughly half of all residential transactions in central London, according to Faisal Durrani, head of research at property consultants Cluttons LLP. Berkeley Group Holdings Plc, the homebuilder with the most exposure to the U.K. capital, fell the most among its peers in London trading on Monday.
U.K. developers are already grappling with sluggish demand amid the nation’s messy divorce from Europe, a cooling property market and prospects of higher interest rates. The capital’s stock of unsold homes under construction is at a record, and shares of homebuilders such as Crest Nicholson Holdings Plc and Berkeley have slumped this year.
“Further taxes on international buyers sends out a conflicting message about post-Brexit Britain being ‘open’ to the world,” Durrani said. “We will have to revisit our residential forecasts with a view to making further downward revisions, should the international residential surcharge be confirmed.”