Brexit risks making house-buyers more cautious, says Telford Homes

Telford Homes has warned that negative Brexit sentiment is affecting housing market demand, with buyers adopting a “wait and see” approach as Britain’s exit day looms.

The London-focused house-builder said customers are more cautious when it comes to purchases over £600,000 as they look for price reductions to “offset a perception of higher risk as Brexit gets closer”.

“In recent weeks there has been an increasing amount of negative commentary around the outcome of Brexit and the impact it may have on the UK economy and housing market,” the firm said.

“This adds to a more general downturn in the market for expensive prime homes in London which has been evident for some time.”

Telford added that overseas demand has been stymied by “recent Brexit commentary and talk of increased stamp duty”.

The warning comes as the company attempts to market its new E16 development to Asian investors.

However, the group said that, despite the uncertain backdrop, it has continued to achieve sales at a consistent rate in the last few months, particularly where houses are priced under £600,000, with a significant proportion of customers using Help to Buy.

Telford expects to book more than £50 million of pre-tax profit, assuming the market “does not worsen further as the Brexit date approaches”.

Profit in the first half will be lower than the second, but is expected to exceed the £8.7 million recorded in the six months to September 30 2017.

Chief executive Jon Di-Stefano said: “Our key objective is to fulfil the ongoing demand for the homes that London needs.

“Notwithstanding the uncertainty surrounding the outcome of Brexit, the group continues to perform well and is focused on increasing the scale of the business driven by the need for homes at affordable price points, in particular in the rental sector.

“We remain confident that our approach to forward sales with increased visibility over profit recognition enhanced by our success in build-to-rent will enable us to deliver strong long-term returns to our shareholders.”

The developer has been shifting its focus to the rental sector, arguing that there is significant support for build-to-rent developments from politicians and investors.