McCarthy & Stone Plc, Britain's biggest builder of retirement homes, said it was seeing more property reservations cancelled in the wake of the Brexit vote as potential customers did not want to sell their existing homes in a weak market.
The company's rate of cancellations of house reservations had "pretty much" doubled in June and July versus the average of 15 percent to 20 percent, its head told Reuters, with the relatively expensive Southeast of England hit the most.
Although cancellations had been less marked last month, August is a slow month for housing before activity typically rebounds in September and October, so it was too early to tell whether the improvement would persist, CEO Clive Fenton said.
"Following the referendum, we did see there was a great element of caution for our more expensive product in the Southeast, where the price point is high and, more importantly, where people are trading down from much more expensive properties," Fenton said. "That problem has moderated in August."
The company, in a trading statement, said it was on track for about 19 percent growth in full-year underlying profit before tax, but that was less than analysts' forecasts and its shares tumbled 14 percent.
Property was one of the sectors hardest hit by the June 23 referendum on Britain's EU membership. The country's biggest builders and estate agents saw their stocks plunge and investors pulled money from commercial funds, leading many to be suspended.
However, some builders and data have indicated some stabilisation of demand in recent weeks. Housebuilder Persimmon, for instance, said in late August it had seen a jump in reservations by new home buyers over the last two months.
House prices picked up speed in August and households recovered some confidence, which had plunged after the Brexit vote, according to surveys released this week.
Fenton said McCarthy, whose business is slightly different as it builds retirement houses, had deliberately held off on exchanging contracts on some new land purchases, closing only 65 deals in the year to Aug. 31, compared with 90 a year earlier.
The housebuilder was now negotiating deferred payment terms, more optionality and price cuts on some of these deals, Fenton said.
Fenton said McCarthy said it had offered higher cash incentives of 6 percent to 8 percent, versus a usual 5 percent, to convince sceptical buyers to close deals in June and July.
This helped it meet its target of a 20 percent increase in legal completions to 2,299 units in the year to Aug. 31, over the previous financial year.
Peel Hunt analysts said profit would be about 9 percent short of market consensus due to the higher incentives and cut their current year profit forecast by 21 percent citing "a lower starting point and uncertainty about the growth potential".
McCarthy & Stone is due to release its full-year results on Nov. 15.
(Reporting by Esha Vaish in Bengaluru; Editing by David Holmes and Susan Fenton)