Slow property market continues to hit Berkeley

HOUSEBUILDER Berkeley has reported a sharp fall in profits as Brexit uncertainty and a slow property market continue to drag on the firm.

The group – which is focused on London and the South East – said yesterday that revenue fell 0.7 per cent at £1.65 billion in the six months ended October 31.

However the City yesterday reacted positively to its resilience.

Pre-tax profit fell more than 25 per cent to £401.2 million and Berkeley sold 2,027 homes at an average selling price of £740,000.

Berkeley said the market in London and the South East “lacks urgency” and underlying demand was constrained by a macro uncertainties and policy interventions, such as high transaction costs and mortgage restrictions.

On Brexit, Berkeley said that, while Britain’s EU divorce was hitting sentiment and confidence, it believed London would remain a “vibrant, tolerant and diverse global city” which would continue to see demand for housing increase.

Boss Rob Perrins said he backed Prime Minister Theresa May’s Withdrawal Agreement because it guaranteed “frictionless trade”.

He said: “Businesses want certainty but people have to be pragmatic. We need frictionless trade and the agreement gives us that.”

Berkeley also upgraded its profit guidance by at least five per cent following what it called a “resilient” start to the year. The upgrade comes after the group repeatedly warned of a profits fall next year, having previously forecast a drop of around 30 per cent.

The group said: “With the resilient start to the year, Berkeley is increasing its pre-tax profit guidance for the current year by at least five per cent and now anticipates a similar split between the first and second half to last year when 55 per cent was earned in the first six months of the year.”

Shares rose more than 2.5 per cent at 3,410p in early trade yesterday.