High transaction costs and ongoing economic uncertainty in London and the South East have stopped Berkeley from ramping up production, the housebuilder said in a trading statement this morning.
Berkeley said: “The fundamentals of the market in London and the South East remain compelling, but the operating environment and its impact on transaction volumes […] do not support the step-up in Berkeley’s production levels that these markets so badly need.”
The housebuilder also blamed the changing planning environment and the “time and complexity” of getting on site following planning approval for its inability to step up activity.
However, the housebuilder added that its five-year profit guidance for the period to April 2021 remains unchanged.
It expects to deliver at least £3.3bn of pre-tax profits for the five-year period, with £1.5bn pre-tax profit to be delivered in the two years ending 30 April 2019.
Berkeley will remain cautious in its investment strategy and its net cash at the year-end will be above its half year position of £632.8m.
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