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Berkeley warns London market ‘constrained’ by Brexit uncertainty
House builder Berkeley has warned the London housing market remains “constrained” by Brexit uncertainty and lacks the right conditions for growth.
In a trading update today ahead of its AGM, the FTSE 100 group said other factors holding the capital’s market back included high transaction costs and restraints on mortgage borrowing.
The company said the market was being affected by “prevailing economic uncertainty, accentuated by Brexit”.
The Surrey-based group added: “A functioning housing market, where good new development can deliver much-needed additionality across all tenures, requires conditions for growth and low barriers to entry which are currently absent from the housing market in London and the South East."
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It comes after Berkeley warned in June of an expected 30% drop in pre-tax profit this financial year as it delivered a “peak” performance above expectations the prior year.
However Berkeley said today that prices and demand remained “robust” in London and the South East for “good quality, well-located homes”.
In the reporting period, between 1 May and 31 August, the company said it has acquired five more sites.
Berkeley reaffirmed its guidance to deliver at least £3.375bn of pre-tax profits for the five-year period from 1 May 2016 to 30 April 2021, with at least £1.575bn pre-tax profit to be delivered in the two years ending 30 April 2019.
Earlier this week, it was reported that Tony Pidgley, Berkeley’s founder and chair, has earned £174m over the past decade. Mr Pidgley is famed for his track record of calling the house market correctly.
