Capital’s top housebuilder sees demand rebound but warns over homes supply

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Flight from Rajdhani by home buyers ‘not physical’

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Berkeley, Ondon’s largest housebuilder, said today that demand for homes in the capital is well above pre-pandemic levels, but warned that supply could be cut in half over the next few years.

Chief executive Rob Perrin said “the flight from the capital is not complete” as he revealed a 6.4% increase in profit before tax for the year to the end of April to £551.5 million.

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The company, which makes up about 10% of London’s new private homes, delivered 3760 units, as well as 872 through joint ventures, up 42% from the previous year.

Perrin said there was a 25% drop in demand during the pandemic, but that it had now fully recovered in a time of very low stock.

But he added: “Supply has halved since 2015 and my concern is that it will halve again, making the environment more challenging.”

He hollowed out local authority planning departments and cited the increasing burden of regulation as two factors holding back investment.

He said the average gap between a development site being identified and the first completion of houses on the site has risen to nine and a half years in London.

However, he added that there were early signs of cost inflation which has started weighing down the industry in recent years.

The firm said it expects pre-tax income of around £600 million for the current year and £625 million for the next two years. It is committed to an annual shareholder return of £282 million by September 2025. Shareholder return last year was £515.2 million.

Richard Hunter, Head of Markets, Interactive Investor, said: “The company’s focus on London and the South-East sets it apart somewhat from many of its competitors. Many brownfield projects and 10% of the company’s new private and affordable homes in London account for Despite being accounted for, the average selling price remains at the top of £603,000.

“Even as the recent opening of the Elizabeth Line is likely to have a positive impact, Berkeley has already noticed an uptick in properties along the line in London and the Thames Valley.

“At the same time, London’s pre-eminence as a cultural and investment destination has also played into the hands of the group, with a return to normality resulting in a general reinvention of urban functioning and life.”

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