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Berkeley Group backs high-LTV schemes, stamp duty reform and brownfield regeneration mooted in manifestos

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  • 19/06/2024
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Berkeley Group backs high-LTV schemes, stamp duty reform and brownfield regeneration mooted in manifestos
Schemes that would improve access to high-loan-to-value (LTV) mortgages, stamp duty reform and brownfield regeneration are welcome, Berkley Group's CEO has said.

Rob Perris, chief executive of Berkeley Group, said that it was “heartened by the strong political consensus behind increasing the delivery of new homes across the country and the recognition that regenerating brownfield land is the most sustainable and popular way to deliver this vital goal”.

He continued: “The next step is to ensure that brownfield sites can come forward at real scale and pace. For this to happen, planning policy and public funding needs to prioritise the provision of affordable homes over the other significant financial demands placed upon the development industry through the planning, taxation and regulatory regimes.

“The industry has absorbed many regulatory changes over recent years and, while all well-intended, when taken together they have stifled investment, housing delivery and growth. In terms of corporation tax alone, the industry’s rate has increased by 10% – from 19% to 29% – over the last two years, including the 4% residential property developer tax [RPDT].”

Perris said that it was “supportive of the initiatives” outlined that would offer customers greater access to “higher-loan-to-value mortgages and to reduce stamp duty”.

“We believe that all surcharges on stamp duty should be removed as, ultimately, these constrain supply,” he added.

 

Berkeley Group delivers over 3,500 homes with many on brownfield sites

According to its latest financial results, the firm delivered 3,521 homes, along with 406 in joint ventures. This compares to 4,043 homes last year and 594 in joint ventures.

The company said that around 87% of its homes were built on “regenerated brownfield land”. Brownfield land building was mentioned in Labour’s manifesto as being crucial to its one-and-a-half million new homes pledge.

The company’s profit before tax decreased by 7.7% year-on-year to £557.3m, with its pre-tax profit guidance for full-year 2025 increasing by 5% to £535m. Its full-year pre-tax profit guidance for 2026 has stayed the same at £450m.

Perris said that this was a “strong performance in a challenging and volatile operating environment, demonstrating the resilience of Berkeley’s business model with its focus on the country’s most undersupplied market”.

He noted that around 80% of its sales were already secured for next year.

Berkeley Group to create Build to Rent platform

Berkeley Group added that it would be establishing its own Build to Rent platform “to maximise returns in today’s market conditions”.

The firm said that it had identified 4,000 homes across 17 of its brownfield regeneration sites that would be the “initial portfolio” for this.

The company said that over the next 10 years, this would represent a 10% increase in delivery, and the portfolio would be financed by a combination of internally generated funds, debt secured against rental properties once it is “income-generating” and introduction of third-part capital at the “appropriate time”.

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