Berkeley Group has sounded the alarm over London's housing market, warning it is struggling to meet government-set targets and calling for urgent action from Westminster. The FTSE 250 housebuilder claims that without decisive intervention, there is "no prospect of material improvement" in addressing what it describes as a dire situation.
London is currently delivering less than 10 per cent of its annual housing target, with the time taken to complete an apartment building extending from five years a decade ago to eight years today. Executive Chair Rob Perrins has praised the previous Labour government for restoring housing policy fundamentals but stressed that further action is needed to tackle the crisis.
One solution proposed by Berkeley is reducing stamp duty on new homes to three per cent, and to zero for first-time buyers. The firm also wants to scrap stamp duty surcharges on second homes, arguing they deter investment in new build properties. This comes as Andy Burnham prepares to take office as Prime Minister, with analysts anticipating significant reforms to housebuilding policy, including a re-evaluation of the Affordable Homes grant programme.
The warning from Berkeley coincides with a challenging period for the company itself, which reported a 15 per cent fall in profit before tax to £451 million for the year ending April. Forward sales dipped by 28 per cent to £1 billion and revenue slipped by four per cent to £2.4 billion.
Mr Perrins attributed some of the current market caution to the wider geopolitical landscape, including the impact of the Iran war on the construction industry's optimism earlier this year. However, he remains confident in London's long-term outlook, describing it as "hugely compelling" even under difficult conditions.
Source: Berkeley Group