Berkeley says that it remains on track to meet its £450million pre-tax profit target for the financial year despite the impact of regulatory delays, inflation and geopolitical tensions on the housing market.
In a trading update for the period from November to 28 February, the housebuilder reaffirmed its £450million pre-tax profit forecast, and expects to reach a similar target in 2027
The statement said that it is also expecting a net cash position of around £300million at the end of the year, after settling over £250million of land creditors and returning £191million to shareholders as of the end of the period. The housebuilder also continued to invest in its Build-to-Rent platform, Berkeley Living.
However, the Group warned that there were signs of fragility in the market as consumer confidence continued to be impacted by ongoing macroeconomic uncertainty and geopolitical events, with the Iran war currently affecting market sentiment.
Berkeley also warned that housing demand could also be constrained by the risk of higher inflation and interest rates remaining higher.
However, the housebuilder said that it had seen increased buyer activity following the slowdown surrounding the Autumn Budget, with sales enquiries remaining strong and the value of underlying reservations returning to similar levels to last summer.
In its trading update, the housebuilder welcomed the government and GLA’s “Homes for London” plans, which is intended to improve viability in London. However, Berkeley warned that the Building Safety Regulator delays are still slowing the delivery of new homes and said that, despite current progress, approvals within the prescribed timeframe remain scarce.
