LONDON (Alliance News) - Northacre PLC on Friday said the UK government's stamp duty increase and the UK's June 23 referendum on whether to remain in the European Union or leave have undermined the London prime residential sector.
Northacre designs, develops and markets prime residential sites in London.
"There is growing concern among developers and investors in the London prime residential sector over increasing costs and a reduction in the volume of transactions. There are a number of factors contributing to these issues, the prime factor being the chancellor's increase in the stamp duty tax which has had an adverse effect on luxury properties," Chairman Klas Nilsson said in a statement.
"The uncertainty surrounding a possible Brexit has further undermined the market. The other main area of concern is the rise in construction costs where, in some instances, costs have doubled over a period of 12 months," he said.
Despite an "abundance" of job opportunities with in excess of 12,000 job vacancies in the UK construction industry, according to Nilsson, there has been a "failure" to attract new recruits resulting in a shortage of skilled labourers.
"Another area to consider is the potential effect a Brexit would have on the many skilled EU Nationals currently employed in the UK without whom the industry would suffer. As a consequence, several contractors have diverted away from the London residential market to seek work in others sectors," Nilsson said.
The chairman's comments came as Northacre said it made a GBP1.2 million pretax loss in 2015, widening from GBP1,858 a year earlier.
Shares in Northacre were untraded at 42.37 pence Friday.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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