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UPDATE 1-Property developer Countryside says trading picks up after Brexit dip
October 12, 2016 / 9:26 AM / a year ago

UPDATE 1-Property developer Countryside says trading picks up after Brexit dip

* Full-year sale completions up 12 pct to 2,657 units

* Private forward order book up 64 pct to 225.4 mln stg

* Shares up 2.5 percent (Adds CEO, analyst comments, details, share movement)

By Esha Vaish

Oct 12 (Reuters) - Property developer Countryside Properties said on Wednesday strong trading since the last week of July had more than offset an initial jump in cancellation rates after Britain’s vote to leave the European Union in June.

The comments add to signs from official data and other builders that Britain’s housing market has recovered from a brief setback in the wake of the “Brexit” vote.

Countryside, which regenerates public land as well as builds houses on its own plots, said trading over the summer and into autumn had been stronger than it had expected and ahead of last year.

“What we did see is an increase of cancellations as people became concerned about the outcome of the referendum. But within three weeks post the referendum we were back trading absolute normal levels,” Chief Executive Ian Sutcliffe told Reuters.

Countryside said it was well placed to meet analysts’ expectations for its new financial year ending September 2017, despite the fact many of its developments are in and around London, which industry experts say is experiencing a larger fallout from Brexit than the rest of the country.

Sutcliffe said Countryside sold almost exclusively to owner-occupiers, and so had not been hit by new taxes on second homes, and that none of its properties were in London’s most expensive central areas.

“Some of the mixed messages that are coming out of the housing sector are saying that if you’re in the wrong location or you’re too expensive then it’s undoubtedly slower,” he said.

“We’re in the right place with the right product at the right price point and in the areas that we operate in (demand is) actually very strong.”

The company, which also operates in the South East, West Midlands and Manchester, had resold houses whose reservations were cancelled in the wake of the Brexit vote for values 1.5 percent higher than the original price, Sutcliffe added.

Countryside said total sale completions rose 12 percent to 2,657 units in the year ended Sept. 30. Its private forward order book was 64 percent higher at 225.4 million pounds ($280 million).

Sutcliffe said Countryside was working on bids for 33,500 regeneration plots and opportunities in that business “continued to grow”.

The company’s strong order book and regeneration work should “support a premium rating to the sector”, wrote Numis analysts, who have a “buy” rating and 296 pence target price on the stock.

The shares were up 2.5 percent at 236.6 pence at 0920 GMT.

$1 = 0.8042 pounds Reporting by Esha Vaish in Bengaluru; Editing by Mark Potter

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