Berkeley has announced it will stop buying new land and focus on its existing landbank as it faces rising costs, regulatory red tape and falling buyer confidence.
The housebuilder set out plans in an unscheduled update, and said that in recent years it had seen an “unprecedented” rise in cost and regulation, coupled with a time of increasing interest rates and falling consumer confidence. The Group also highlighted the impact of “prolonged geopolitical and macro-economic volatility and uncertainty”.
Berkeley said that it had seen signs of a “modest” recovery in sales volumes in the first two months of 2026, but that the geopolitical events and the subsequent macroeconomic consequences it voiced concern about in its last trading update in March had now become a reality.
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The announcement said: “We are today announcing decisive action to maximise long-term shareholder value by prioritising value creation from our existing land holdings, tightly sequencing construction, flexing the pace of BtR investment and maintaining disciplined capital allocation while continuing shareholder returns.”
Berkeley also said that, despite recent improvements, the Building Safety Regulator’s gateway process was still not working effectively.
The announcement continued: “The implementation of the Building Safety Regulator’s new gateway process for building approval has lengthened the time between obtaining planning approval and starting on site by around 12 months. The system is yet to operate effectively and predictably, further impacting the timeline for the delivery of new developments.”
Berkeley said that it plans to reduce its work in progress investment to match its current sales levels, which it believes is in the best interests of its shareholders, rather than pursuing short-term profit targets.
Despite the announcement, the housebuilder still remains confident that pre-tax profit for the full financial year will be in line with its guidance of £450million. Berkeley also expects to deliver over £1.4billion of pre-tax profit over the next four years, with operating margins in the region of 17.5% to 19.5%.
The Group also said that it remains “firmly committed” to its BtR arm, Berkeley Living, and its strategy of delivering 4,000 BtR homes by the end of FY35.
