Housebuilder Berkeley has warned that London’s property market remains under pressure from high transaction costs, mortgage restrictions and Brexit uncertainty.
While the group – which is focused on London and the South East – said prices continue to be robust in and around the capital, it cautioned once more over “headwinds” affecting the market.
“These headwinds affect all segments of the market from home-movers to downsizers and investors alike,” it said.
The comments come after the group has repeatedly warned of an expected profits dip next year, forecasting a drop of around 30% following a peak in the year to April 30, when profits surged 15.1% to £934.9 million.
But in its latest trading update, the group backed previous guidance to deliver at least £3.4 billion of pre-tax profits for the five years to April 30 2021, with at least £1.6 billion of profits over the two years to April 30 2019.
The group, which is holding its annual meeting for shareholders on Wednesday, said it was continuing to invest in the market, having bought five new sites since the start of May.
It also called for changes to help developers in the London and South East region overcome woes caused by recent changes to stamp duty and Brexit uncertainty.
Berkeley said: “A functioning housing market, where good new development can deliver much-needed additionality 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.”
In June, Berkeley said it sold 3,536 homes over its last financial year – down more than 9% from the 3,905 sold a year earlier – at an average price of £715,000, against around £675,000 a year earlier.
Looking at the London market as a whole, Berkeley noted that overall transaction volumes were 19% lower than two years ago while new starts were 30% below those in 2015.