Falling sales at Berkeley prompts housebuilder to tread cautiously

London and southeast housebuilder, Berkeley, has reported that there has been a 25% fall in sales since the end of September compared to the first five months of its financial year beginning last May.

Related topics:  Business,  Construction,  Housebuilder,  Berkeley
Property | Reporter
13th March 2023
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Acknowledging the drop in sales in its report covering November 1 2022 to February 28 2023, the firm said it was taking a “cautious approach” to releasing new phases of schemes, with a focus on the quality of forward sales as well as cost control and maintaining operating margins.

Berkeley described its sales performance as “resilient” amid market volatility - taking in the effects of the mini-Budget – and reflected “the underlying demand for quality homes” in its geographic areas.

The housebuilder said that sales pricing had remained firm during the trading period and above Berkeley’s business plan levels. Build cost inflation, it said, was showing early signs of moderating.

Despite the difficult market, the business reported remaining on track for pre-tax earnings of around £600 million for its year ending April 30 2023. It said this was underpinned by its cash due on exchanged forward sales, expected to be above £2 billion at its year-end. This compares to the £2.17 billion of FY 2022.

Berkeley also said it aimed to be in a position to sign the developer remediation contract attached to the government’s building safety pledge in line with DLUHC’s deadline, which is currently 13 March.

It stated: “Berkeley has always taken responsibility for life-critical fire safety matters in our buildings and we are working through the associated procedural matters with the government.”

The housebuilder also commented that with the government’s proposed changes to the National Planning Policy Framework and Levelling Up and Regeneration Bill, brownfield development needed a separate planning category “if brownfield sites are to come forward for residential delivery and play the central role they can and should in addressing the housing crisis."

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