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Berkeley boosts profits by 53%
House builder Berkeley has boosted its annual profits by 53% to £812.4m, as its chair blames affordable housing and tax obligations for a fall in London housing starts.
In its results for the year ending 30 April, published today, Berkeley announced that it was on target to deliver £3bn of pre-tax profit in the five years beginning 1 May 2016.
Tony Pidgley, chair of Berkeley, hailed the company’s “unique operating model”, saying it was this that enabled the group to maintain financial strength in the face of various headwinds.
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He said: “Brexit and wider global macro instability impact both confidence and sentiment and will result in constrained investment levels.”
In March, the company criticised obligations on affordable housing for a 30% fall in homes started across London.
In today’s results, Mr Pidgley said: “The headwinds from changes in recent years to SDLT [Stamp Duty Land Tax] and mortgage interest deductibility – coupled with the planning environment’s increasing demands from the combination of affordable housing, CIL [the Community Infrastructure Levy], Section 106 obligations and review mechanisms – are resulting in reduced levels of new housing starts in London.”
Berkeley’s results also pointed out that it built 10% of last year’s new London homes, including 10% of the city’s new affordable housing.
