* Brexit, property tax take some heat out of London market
* Commercial property companies also facing pressure
* House prices a divisive issue for Britons (Adds details, background, British Land)
By Costas Pitas
LONDON, Nov 16 (Reuters) - Britain's biggest housebuilderBarratt said it was cutting the price of some of itsmost expensive London homes by up to 10 percent in the latestsign that the market has cooled after property tax increases andthe Brexit vote.
After an initial dip following the June 23 referendum,demand for new homes in most of Britain, including outer London,has bounced back according to builders and surveys, but itremains weak in the capital's wealthiest central areas.
The Brexit vote followed an increase in property tax onbuy-to-let and second homes which particularly affected centralLondon. Some prospective buyers are investors seeking a rentalincome and have bought cheaper homes instead or pushed for pricecuts to offset higher taxes.
"We do recognise that at price points about 600,000 pounds ($750,009), particularly at price points once you move above 1million, the (London) market is clearly slower," Barratt CEODavid Thomas told Reuters.
"You are seeing commentary about prices backing offyear-on-year on a 5 to 10 percent basis so I think that it's inthat sort of order," he added.
The vote to leave the EU will contribute to a 9 percent fallin prices in prime central London, which includes mansions andluxury apartments in Knightsbridge, Notting Hill and Chelsea,according to estate agents Savills.
Thomas attributed the softening London market to more homescoming to market and the increase in stamp duty, property tax,rather than the EU vote.
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House prices are key to consumer confidence in Britain,where many gauge the strength of the economy by rises in thevalue of their most valuable asset. However, complaints about the affordability of homes have risen to the top of thepolitical agenda.
The average price of houses in Britain is around 220,000pounds, with many struggling to buy, particularly in the capitalwhere prices are much higher.
While Britain's largest housebuilders have reported stronggrowth in recent months, there have been mixed signs on theprogress of Britain's commercial property market, which wasfirst to be hit by Brexit as investors pulled cash from funds.
London-based property company British Land, whichspecialises in retail and office space, said on Wednesday thevalue of its portfolio fell 3 percent in the six months to theend of September.
Shares in Barratt fell 2.8 percent to 469 pence at 1053 GMTand shares in British Land were down 2.1 percent to 593 pence.
Barratt, which operates across the country, said it remainedon track to hit a key financial target for return on capital asincreased sales in northern and central England helpedcompensate for a cooling market in London's priciest postcodes. ($1 = 0.8031 pounds) (Reporting by Costas Pitas; editing by Keith Weir)