Profits soar at Berkeley despite housing market uncertainty

Berkeley now holds enough land to build more than 46,000 homes as profits continue to soar at the company.

But uncertainty over the London housing market could delay delivery of much needed new homes.

Latest results for the year to April 30 2017 show pre-tax profits up to £812.4m from £530.9m last time on turnover up to £2,723m from £2,047m.

Berkeley accounts for 10% of homes under construction in London and has built 19,000 new homes in the last five years.

Chairman Tony Pidgley sounded a warning about current market conditions in the capital as reservations dipped 25% last year.

He said: “The housing market has stabilised in London and the South East but, while Berkeley is in excellent shape with further additions to our unrivalled land bank in the period, it is an inescapable fact that we are facing a number of headwinds and a period of prolonged uncertainty.

“For Berkeley, this leads to greater uncertainty around the timing of delivery of homes from our land bank but will not change our absolute focus on the quality of the homes and places we create.

“Notwithstanding the uncertainty, Berkeley’s strong forward sales position and land bank provide sufficient visibility to reiterate its previous guidance of delivering at least £3.0 billion of pre-tax profit in the five years beginning 1 May 2016, assuming prevailing market conditions persist.”

Berkeley reported that build cost inflation remained stable at around 6%.

It said: “There is a recognised skills gap in the UK construction workforce and it is hard to predict how build costs will be affected by Brexit as approximately half of London’s site labour comes from the EU.

“This needs to be addressed by a combination of continued access to EU labour, skills training and innovation in construction if the industry is to achieve its medium term production aspirations.”

The firm currently has 13,000 people working on 58 live sites across London and the South East.