Key facts
- Berkeley warns London is significantly missing its annual housebuilding targets, delivering less than 10% of the goal.
- The housebuilder stated it takes eight years to complete an apartment building in London, up from five a decade ago.
- Berkeley is calling for reduced stamp duty on new homes and the removal of surcharges on second homes to encourage investment.
- The firm reported a 15% decrease in profit before tax to £451m for the year ending April.
- Berkeley previously announced it would halt land acquisition and stated it can "no longer invest" in London due to tax and regulatory burdens.
Berkeley, London's largest housebuilder, has issued a stark warning about the capital's housing market, stating it is on course to miss its housing targets and is experiencing a significant slowdown in construction. The firm attributes this to an "excessive tax burden" and regulatory hurdles, which it claims deter essential investment and regeneration.
Rob Perrins, Berkeley's executive chair, called for "strong political leadership" and "decisive intervention" from the government, urging a reduction in stamp duty for new homes and the scrapping of surcharges on second homes. He also advocated for the immediate implementation of City Hall's Homes for London plan. Berkeley estimates that these measures would not only help London meet its housebuilding targets but also boost tax revenues and GDP by one percent.
The company's financial results reflect these challenging conditions, with profit before tax falling by 15% to £451m in the year to April, and forward sales dipping by 28%. Revenue slipped by 4% to £2.4bn. Berkeley has previously announced a halt to land acquisition and stated it can "no longer invest" in London due to the continuous increase in tax and regulatory burdens, citing a recent instance where plans for 867 homes were blocked by a planning inspector.
Berkeley's intervention comes as Andy Burnham is poised to become Prime Minister, with expectations of a shake-up in housebuilding policy, particularly concerning social housing. Analysts at Panmure Liberum have cautioned that potential changes to the Affordable Homes grant program could delay payments, but they anticipate Burnham's pragmatic approach would prevent drastic disruptions to initial funding.