Chairman, Tony Pidgley said the more stable market created opportunities to expand again and Berkeley aimed to grow its land bank by 10% over the next 12 months.

He said: “The land market has begun to yield some attractive opportunities again and, over the course of the year, a growing sense developed that the worst is over with a return to GDP growth.

“The housing market in London and the South East has stabilised, albeit at transaction levels lower than we had become used to prior to the turbulent market of the previous two years,” he added.

The house builder said its main cost pressure continued to come from planning tariffs, in the form of Section 106 contributions, affordable homes requirements, and stringent building regulations.

It warned that these requirements had to be realistically aligned to ensure new homes could be brought forward in the current marketplace.

Despite these pressures operating margins remained above 17% in the year to April 30.

Pre-tax profits slid 8.4% to £110.3m, which were still ahead  of city expectations.

A change in the mix of properties sold saw average sale prices fall from £395,000 to £263,000 – largely accounting for a 12.4% drop in group revenues to £615.3m.

But Berkeley raised the number of homes sold to 2,201 against 1,501 last year.

The group said it had agreed to buy 2,200 plots across 20 sites in London and the South East and revised planning consents on 38 of its sites.

Berkeley said its target market in London and the South East was being buoyed by demand from cash rich investors and overseas buyers taking advantage of the weak pound.

Customers snapping up properties for investment accounted for more than 50% of underlying sales reservations, according to the group.