Housebuilder Berkeley Group has announced it will stop buying new land and reduce investment in ongoing construction, citing global volatility and challenging market conditions. The company, which focuses on urban developments, particularly in London, said the decision reflects recent geopolitical events, including the conflict in the Middle East.
Berkeley had previously warned in March that the US-Israel war with Iran was weighing on risk sentiment, and it noted concerns over persistent inflation and elevated interest rates. On Wednesday, the firm stated that the risk of a slowing housing market recovery “has now become a reality.”
The company also highlighted an “unprecedented” rise in costs and regulatory burdens, which have extended the time between planning approval and construction start by about a year. As a result, Berkeley said it “does not believe it can make its required rate of return on investment in new land acquisitions” under current conditions.
Berkeley will now focus on its existing developments, which include land for over 50,000 homes, with an additional 10,000 in the pipeline, all located in London and the South East. It will also reduce investment in ongoing construction to align with current sales levels.
Despite the pullback, the London-listed firm expects pre-tax profit of £450 million for the year ending April, and forecasts over £1.4 billion in profit over the next four years to 2030.
