Berkeley races to build out all sites with planning

Aaron Morby 6 years ago
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London house builder Berkeley Group has ramped up house building activity, staring work on all its sites with planning approval.

Chairman Tony Pidgley said the firm had pressed the start button on 65 of its 77 sites, as it delivered a 40% rise in pre-tax profits to £380m in the year.

The firm is trying to drive the remainder through the planning process to meet demand after completing 3,742 new homes in the year at an average selling price of £423,000.

Berkeley’s move to increase building activity comes as the first signs emerge of cooling in the overheated London property market, after selling asking prices actually fell in the last month by 0.5%, according to property website Rightmove.

Pidgley said: “These are strong results which reflect the current market conditions and Berkeley’s bold strategy to invest at the right point in the economic and housing cycle.”

He said that Berkeley has invested an extra £353m in buying nine new sites in the year, sufficient to build a further 2,500 new homes.

Investment in work in progress soared to £1.18bn as the house builder speeded up construction to meet demand in the capital.

“Berkeley is building on all of its sites that have an implementable planning consent and we are employing over 11,000 people directly on our sites sustaining a further 10,000 jobs indirectly in the supply chain.

“This year we have completed some 30% more homes than at the peak of the market in 2007,” said Pidgley.

Berkeley reported widespread upward pressure on build costs and restricted availability of materials and skilled labour within the supply chain but said the impact had been broadly offset by house price increases.

Operating margins rose from 20.4% to 23.1% over the year.

The group’s pipeline of future land now comprises over 11,000 plots with a potential gross margin of some £1.5bn.

Nine new sites have been added to the pipeline in the year, including six in London at Southall, Kingston, Westminster, Hornsey, Battersea and Orpington and three outside London in Bracknell, Ockham and Sevenoaks.

The house builder said it aimed to release a further £122m to shareholders in September, putting it on track to meet the first milestone in its pledge to return over £1.7bn to shareholders by 2021.

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