Berkeley forecasts strong profits

Housebuilder Berkeley Group has predicted profits to be at the top end of forecasts this year, with the London and South East housing market becoming “stabilised”.

While today’s trading statement from the Group covering November 2016-February 2017 revealed that housing starts in London fell by 30% and reservation rates also dropped 16%, Berkeley said enquiry levels remained “robust”.

In the last two months reservations were higher than a year earlier for Berkeley as pricing continued to be “resilient” over the period.

As such, the company said it was “on target” to make at least £3bn in pre-tax profits over the five years to April 2021.

It said the market had been adversely affected by a number of factors unrelated to Brexit uncertainty, including changes to stamp duty, the challenges of securing planning permission and the demands to provide affordable housing.

The housebuilder said: “Berkeley is concerned by this under-supply and the knock-on effect it has on the provision of housing of all tenures which, if not addressed, represents a threat to London remaining the inclusive and open global city which is so important to London and the UK’s growth and prosperity.

“We therefore welcome the White Paper and the London Mayor’s continued focus on housing but note that these will take time to effect change, given the competing priorities. Berkeley is uniquely placed to maintain its high levels of production in London and the South East and we are onsite in production on 58 sites.”

Shares in Berkeley rose by 5.26% to £31.19 in early trading following the statement.

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