London’s residential market remains constrained with the conditions for a “functioning housing market” absent in the capital and the South East, Berkeley has said in a trading update.
Although the housebuilder said that pricing has remained robust in the region due to demand for good quality homes, there are headwinds that affect all parts of the market from home movers to downsizers and investors.
In a statement, Berkeley said: “In essence, this is a market that lacks urgency and London remains constrained by high transaction costs, restrictive income multiple limits on mortgage borrowing and prevailing economic uncertainty, accentuated by Brexit.
“A functioning housing market, where good new development can deliver much needed additionally across all tenures, requires conditions for growth and low barriers to entry, which are currently absent from the housing market in London and the South East.”
Berkeley said that it is finding opportunities to invest and has acquired five new sites in the first four months of the financial year. It added that it is on course to deliver at least £3.37bn of pre-tax profits for the five-year period from 1 May 2016 to 30 April 2021.
The company has just announced plane for a residential scheme in Staines.
It confirmed a dividend of £44m, or 33.3p per share, will be paid to shareholders on 14 September.
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