London housebuilder blames Brexit uncertainty and planning red tape, but profit still soars

Berkeley has reported almost a third drop in project starts in Lodnon, as the housebuilder blamed Brexit uncertainty, planning red tape and higher stamp duty.

In a trading update covering the four months to the end of February, Berkeley said it was “concerned” by the 30% drop in starts at a time when London has a chronic housing shortage.

The firm said: “Berkeley is concerned by this under-supply and the knock-on effect it has on the provision of housing of all tenures which, if not addressed, represents a threat to London remaining the inclusive and open global city which is so important to London and the UK’s growth and prosperity.”

Berkeley, run by chairman Tony Pidgley, said it welcomed the government’s recent housing white paper and London mayor Sadiq Khan’s commitment to increasing supply, but warned their policies “will take time to effect change”.

Berkeley said sales reservations over the seven months since the EU referendum were also down 16% on the previous year, but said rates had recovered over the first two months of 2017.

Despite the drop in starts and reservations, Berkeley said it was still on track to hit its target of delivering at least £3bn in pre-tax profit over the next five years.

The firm said pre-tax profit for the current year to April was likely to be at the top end of analysts’ expectations, with a similar level of profitability next year.