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Berkeley recorded a 7.7% decline in pre-tax profit for the first half of its fiscal year, reaching USD 338 million, while home deliveries fell to 2,022 units at an average price of £570,000. The drop was influenced by high borrowing costs, cautious buyer sentiment, and new luxury home taxes. Despite these challenges, the company retained its annual guidance of £450 million and outlined plans to launch a build-to-rent platform in 2026, indicating confidence in London’s long-term housing demand and strategies to diversify revenue streams.
Berkeley, a London and South-East England-focused homebuilder, reported a 7.7% decline in its pre-tax profit for the first half of its fiscal year, which fell to USD 338 million (around £254 million). Over the same period, the company delivered 2,022 homes at an average selling price of £570,000, both figures below last year’s levels. The slowdown has been attributed to cautious buyer sentiment ahead of the annual budget and still-high borrowing costs, which have tempered home sales in recent months. Advertisement
The newly introduced luxury home taxes in the November budget are expected to impact Berkeley’s high-end projects further, given its exposure to expensive London homes. Despite this, the company pointed to resilient demand in the region and government measures aimed at speeding up construction as factors supporting its long-term outlook. Executive Chair Rob Perrins emphasized that the effectiveness and pace of these measures would be key, while the company remains optimistic about overall prospects in London.
Berkeley highlighted factors contributing to its long-term optimism, including undersupply of homes, potential reductions in interest rates, improved mortgage access, and steady wage growth. The company retained its annual pre-tax profit guidance at £450 million for fiscal 2026, with a similar expectation for 2027. Analysts noted that maintaining this guidance would reassure investors, particularly given market uncertainties around budget announcements.
To diversify revenue streams, Berkeley plans to launch its build-to-rent platform, Berkeley Living, in early 2026. The first residents are expected to move into the Alexandra Gate development by spring, reflecting a shift towards rental-oriented projects alongside traditional homebuilding. Analysts and industry observers view these initiatives as measures to adapt to changing market dynamics while sustaining growth despite short-term challenges.
Source Reuters
5th Jun, 2025
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