Brexit uncertainty contributes to a 20% drop in Berkeley home reservations

In its latest financial results, the London and South East focused Berkeley Group reported seasonally adjusted pre-tax profits to be up 5.6% to £479.9m but said that reservations to the end of May were down by a fifth, impacted by uncertainty in the run-up to the EU referendum.

Chairman Tony Pidgley said the result of the Brexit vote would impact on the future of housebuilding and is openly supporting Britain remaining in the EU.

“London’s status as the world’s best big city is underpinned by labour mobility, cultural diversity and a constant influx of talent and investment from around the world, and the UK economy in turn is powered by the success of our capital city.”

However, he said that the Berkeley Group had a clear view of the way forward and is confident for the future of the business, with forward sales to the end of April 2016 increasing in value by £3.25bn compared to the year ending April 2015.

He said it is important that housing policies are developed that consider local planning, property tax and the delivery of affordable housing.

“None of this is easy, but if we get it right, it will have a profoundly positive impact on the future of London and the country as a whole,” said Pidgley.

Berkeley sold 3,776 homes in the year ending April 2016, up from 3,355 the previous year and with an average selling price of £515,000 – a drop from £575,000 in 2015.

Chief executive Rob Perrins said that selling off large developments in London prior to this year also contributed to a drop in reservations for the first five months to the end of May and that increased taxes on the buy-to-let market had further contributed to the drop.

However, he said the group remains on target to deliver pre-tax profits in the region of £2bn over the three year period ending 30 April 2018.