The house building giant highlighted its updated strategy in its half-year report to the City today.
Chief executive Rob Perrins said: “In the near-term, Berkeley will focus on matching production on existing sites to demand and delivering its forward sales over the period to 30 April 2025.
“Beyond this, the current operating environment, characterised by record levels of planning tariff within an increasingly complex and slow planning system, at a time of high build costs, increased regulation and higher corporation tax, alongside the Residential Property Developer Tax and proposed new Building Safety Levy, will inevitably continue to see a reduction in supply of new homes in London and the South East.
“Berkeley’s delivery of new homes will therefore result in a reduction in its land holdings.”
Sales during the current six-month period were 2% ahead of last year but since the end of September they were 25% lower than levels for the first five months of the financial year.
Berkeley said: “This is a resilient performance in the context of the current market volatility and reflects the strength and depth of demand in London.”
Cancellation rates also crept up from early-teens to around 20% in the last couple of months.
Berkeley made a pre-tax profit of £284.m for the six months to October 31 2022 from £290.7m last time while delivering 2,080 homes – 10% of London’s new properties.
Perrins said: “These robust results reflect the strength of Berkeley’s uniquely long-term operating model and the enduring appeal of high-quality homes and places within London and the South-East – a region which is the country’s most under-supplied market – in spite of the uncertain and challenging operating environment.
“While Berkeley is ready and able to invest in new opportunities to increase delivery, we are positioning the business to reflect today’s environment until the conditions for growth are present to support responsible, sustainable investment. Future investment decisions will need to take into account the increase in corporation tax of 6%, the 4% RPDT and the proposed additional building safety levy designed to raise a further £3 billion from the industry.
“We are experienced at operating in times like these and will focus on generating value from our existing assets with limited new investment, matching supply to demand and cash generation.
“London is the most beautiful and dynamic city in the world but is not currently attracting the necessary investment from private or public sources, including for infrastructure and affordable housing grant, to unlock more brownfield sites and address the systemic under-supply of new homes.”
