Shares in Telford Homes plunged more than 13 per cent in early morning trading today as it warned of falling house prices and flat activity in London’s property market over the next 12 months, with Brexit uncertainty weighing on buyer confidence in the capital.
The London-based housebuilder said that recent “negative” Brexit commentary and talk of increased stamp duty has hampered overseas demand for more expensive properties.
Telford Homes boss Jon Di Stefano told City A.M.: "As we get closer to Brexit, people get more and more nervous, and the negative commentary surrounding Brexit is going to be challenging. You’re likely to see more developers discounting and dropping prices – not all of them have the luxury to wait and see what happens."
He added: "People are going to take a wait and see approach and the commentary around Brexit magnifies that...Mark Carney’s hypothesis over house prices isn't helpful."
Yet Stefano, whose Aim-listed firm said today it was still continuing to achieve consistent sales on cheaper homes under £600,000, added that he was confident London "will bounce back in the end".
Stefano’s comments come amid growing evidence of a slowdown in the market for prime high-end homes across Central London, with news yesterday that estate agent Foxtons is closing its flagship Park Lane branch.
Read more: Foxtons closes flagship Park Lane office
However, while more expensive properties have fallen victim to stamp duty costs and political volatility, Telford Homes has largely remained unscathed, after focusing on more affordable homes that have been bolstered by the government’s help to Buy scheme.
In recent years Stefano has also been ramping up investment in Outer London’s build-to-rent market, in an attempt to boost the output and scale of the business at a time when the capital is in a short supply of housing.