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Berkeley Group home reservations

ended 08. September 2023

In its latest results, Berkeley Group has just announced: 

  • In terms of the sales market, enquiries have stayed at similar levels over the last four months, but the value of underlying private sales reservations is some 35% below last year's rate, reflecting the elevated macro-economic and political volatility. Pricing remains resilient and above our business plan levels, due to the constrained supply of both new-build and second-hand homes to the market, while cancellation rates are stable. 
  • The complexity and protracted nature of the current planning system and lack of clarity surrounding certain regulatory changes affecting our sector, at a time of considerable uncertainty for the UK economy with persistent high inflation and interest rates, continues to deter investment into brownfield regeneration and the wider housebuilding sector.  Consequently, Berkeley has not acquired any land in the period and will only invest very selectively in new opportunities.

Any thoughts, whizz them across.

5 responses from the Newspage community

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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
There is now a cacophony of disapproving voices from all house builders aimed squarely at the Government. The message is clear: the planning system is an omnishambles and political uncertainty is causing a dismal amount of houses to be built. All house builders are desperately crying out for a General Election and, in all likelihood, a change in party. The Tories should be ashamed of what they have, or more accurately haven’t, done to the Uk housing sector.
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Jai Khandpur MRICS
Investment Manager at IP Global
The fundamentals of supply and demand are evident in this latest set of results. The entrenched lack of supply in the UK property market will continue to support house prices despite rising interest rates and economic volatility taking their toll. It's a buyers' market as there is less competition due to affordability reasons and broader economic uncertainty but people shouldn't expect to see massive drops in prices.
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Joe Garner
Founder & Managing Director at Joe Garner Consulting
If large house builders in the UK are exasperated with the planning system, it's safe to say that, for SMEs, it's like trying to navigate a maze with a blindfold on. SME property developers will soon be opening theme parks instead, as the rollercoasters will be less extreme and the queues for planning permission equally long. On the bright side, at least the planning system provides a great opportunity to perfect the art of patience, resilience and an impressive repertoire of creative expletives.
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Richard Campo
Founder at Rose Capital Partners
The Berekely Group's results and response clearly highlight the largest issues in the property market right now: high interest rates putting off buyers and investors, a lack of supply and planning restrictions strangling the market, which results in inflated house prices. As the Government hasn't had a coherent housing plan for many years — and a revolving door of housing ministers — it's no surprise that homeownership is decreasing in this country and falling behind our European neighbours. While mortgage rates are starting to fall, without a long-term strategy on housing, homeownership will be taken away for the majority as a realistic goal, which is bad for the economy and society as a whole.
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Graham Cox
Director at Bridging Hub
Private sales down 35% from last year show the true extent of the headwinds facing housebuilders. People want to buy but it's just prohibitively expensive.

Berkeley has made no land purchases during the year either, citing the difficulty with planning and prevailing market conditions. No doubt they are also looking to preserve cash as they navigate these choppy waters.